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Using fairness instrumentally versus being treated fairly : a structural resolution Pillutla, Madan Mohan 1995

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USING FAIRNESS INSTRUMENTALLY VERSUS BEINGTREATED FAIRLY: A STRUCTURAL RESOLUTION.byMADAN MOHAN PILLUTLAB.E. (Hons)., Birla Institute of Technology and Science, Pilani, India, 1988M.S., University of Illinois, Urbana-Champaign, 1993A THESIS SUBMITI’ED IN PARTIAL FULFILMENT OFTHE REQUIREMENTS FOR THE DEGREE OFDOCTOR OF PHILOSOPHYinTHE FACULTY OF GRADUATE STUDIES(Department of Commerce and Business Administration)We accept this thesis as conformingto the required standardTHE UNIVERSITY OF BRITISH COLUMBIAAugust 1995Madan Mohan Pillutla, 1995In presenting this thesis in partial fulfilment of the requirements for an advanceddegree at the University of British Columbia, I agree that the Library shall make itfreely available for reference and study. I further agree that permission for extensivecopying of this thesis for scholarly purposes may be granted by the head of mydepartment or by his or her representatives. it is understood that copying orpublication of this thesis for financial gain shall not be allowed without my writtenpermission.(Signature)Department of 1’) Mrr(qJThe University of British ColumbiaVancouver, CanadaDate__________DE-6 (2/88)- IIABSTRACT.Research on justice in social exchange distinguishes between fairness as a goal andfairness as an interpersonal influence strategy. Strategic fairness is considered to beepiphenomenal and explainable by more basic motives, most notably, self-interest; fairnessas a goal is based only on Lerner’s (1982) model. Recent fmdings contribute to a newmodel which specifies that allocators of resources use fairness strategically while recipientstreat justice as a goal by reacting to perceived injustice. This dissertation presents the modelalong with an experimental test of its predictions, which also addresses an ongoing debatein experimental economics on the role of fairness in ultimatum and dictator games.The experiment was designed to distinguish between fairness as an interpersonalstrategy and fairness as a goal. Participants moved from allocator to recipient roles invarious experimental conditions that varied their information and interdependence.Results show that ultimatum offerers made smaller offers when respondents knewhow much they were dividing and larger offers when fairness was salient. Dictators madesmaller offers than ultimatum offerers, but did not reduce their offers as much as ultimatumofferers when the respondent did not know how much was being divided. They appearedunaffected by the salience of fairness. Respondents rejected more small offers than largeones and more offers when they knew the amount being divided. The rejection rates ofultimatum and dictator offers did not vary. The results show substantive support for the ideathat justice motives are role specific. Unexpected findings led to modifications of the modelwith respect to the interdependence of the actors.ifiThe results are discussed in terms of their implications for the study of justice ingeneral and for the specific case of fairness concerns in bargaining games.ivTABLE OF CONTENTSAbstract 11Table of Contents ivList of Tables viiList of Figures ixChapter 1 Introduction 1Chapter 2 Framework to Distinguish Between Goals and Strategies 11Distinguishing Between Motives 11Social Motivation 13Impression Management 15Information Asymmetry 16Ultimatum and Dictatorship Games 17Chapter 3 Justice Motives: The Effects of Roles and Power 21(Avoidance of) Injustice as a Goal 22Distributive Justice Theory 22Equity Theory 23Status Value Theory 24Retributive Justice Theory 26Injustice as a Strategy 28(Avoidance of) Injustice 28Overreward as a Motivator 29Justice as a Goal 30Justice Motive Theory 31Justice as a Strategy 34Normative Theories 35Instrumental Theories 36Impression Management Theories 36VPower 42Chapter 4 Ultimatum and Dictator Games 45Ultimatum Bargaining 45Offerers 45Rejection of Small offers 47Dictator Games 50Chapter 5 Applying the Justice Model to Ultimatum and Dictator Games 53Chapter 6 Hypotheses 61Chapter 7 Procedures 65Chapter 8 Results and Discussion 71Hypotheses Tests 73Tests for the Assumption that Offers are 74Constructed to Appear FairTests for the Assumption that Justice 76is a Goal for OfferersTests for the Assumption that Justice is 76neither a Goal nor a Strategy for OfferersTests for the Assumption that the Goal of 76Respondents is to Avoid InjusticeTests for the Assumption that Respondents 79React to Injustice for Strategic ReasonsTests for the Assumption that Respondents 79are not Concerned about JusticeA Note on Unsupported Hypotheses 80Discussion 81Chapter 9 Conclusions and Implications 89Research on Ultimatum and Dictator Games 89Models of Justice 93Chapter 10 Proposal and Design for Future Studies 102Unexpected Results 102Extension to Other Contexts 106Footnotes 114References 116Appendix 1 Sample Experimental MaterialsviViiList of TablesTable 1 Experimental Design for Ultimatum Games 124Table 2 Experimental Design for Dictator Games 125Table 3 Mean Ultimatum Offers in the Various Experimental 126ConditionsTable 4 Frequencies of Respondents’ Acceptances of Ultimatum 127Offers in the Various Experimental ConditionsTable 5 Means of Fairness Ratings in Ultimatum Games in the 128Various Experimental ConditionsTable 6 Mean Dictator Offers in the Various Experimental 129ConditionsTable 7 Frequencies of Respondents’ Acceptances of Dictator 130Offers in the Various Experimental ConditionsTable 8 Means of Fairness Ratings in Dictator Games in the 131Various Experimental ConditionsTable 9 Overall Manova Table for Ultimatum and Dictator Offers 132in all Experimental ConditionsTable 10 Manova Table for Ultimatum Offers in all Experimental 133ConditionsTable 11 Catmod Anova Table for Acceptance/Rejection of Small 134and Large Offers in all Experimental ConditionsvifiTable 12 Results of the Logistic Regression Analysis Using the 135Factor Scores of Fairness Ratings as Predictors ofResponses Of Large and Small Complete InformationUltimatum and Dictator OffersTable 13 Design for the Proposed N-Person Allocation Experiment 136List of Figures.Figure 1 Theories of Justice 137ixxAcknowledgementsI thank my committee members Dr. Keith Murnighan (Chair), Dr. Nancy Langton and Dr.Ken MacCrimmon for their comments and more importantly for their patience and support.I also thank Dr. Langton for her help in securing the permission of the instructors of Comm321 for conducting this experiment in their classrooms. Dr. Langton, Dr. Dev Jennings,Richard Stackman and Vivien Clark allowed me to conduct the experiment in their classrooms. I am immensely grateful to them and to the students who participated in theexercise. I thank Charalambos Iacovou for his help with data collection. I thank ArchanaVepa for her support and understanding during the writing of this thesis. I am grateful forthe financial support provided by the I. W. Killiam Foundation, the Vinod K. Sood, and theE. D. MacPhee scholarships through the course of my doctoral program in the Universityof British Columbia. The funds for conducting the experiment came from a SHHRC grantto Dr. Murnighan.1CHAPTER 1.INTRODUCTIONDiscussions surrounding the concept ofjustice have continued since the times of Platoand Socrates. Current research on justice is based on two ancient and implicit assumptions:people are motivated by a desire to be fair and to be treated fairly. Most people would agreewith the notion that fairness concerns motivate a variety of behaviours, and there is generalconsensus among social scientists that justice considerations play a central role in socialbehaviour (Lerner, 1981). Justice motives are particularly relevant in social exchangesinvolving resource allocation. Thus, most theories of justice focus on resource exchange,its process and its consequences.Several theoretical models focus on the role of justice in human behaviour: Equitytheory (Adams, 1965) and relative deprivation theory (Crosby, 1976) focus on people’sreactions to inequity; status value theory (Berger, Zelditch, Anderson and Cohen, 1972) andmodels of comparative outcome judgement (Bazerman, Lowenstein and White, 1992) studyhow people evaluate the fairness of actions (e.g., distribution of resources) or relationships(e.g., bargaining relationships); other models focus on how people adopt different rules orconventions when distributing resources (Leventhal, 1976), and whether justiceconsiderations are ends in themselves or merely means to other desirable ends (e.g., Lerner,1981).While most researchers within these traditions agree on the centrality of justiceconsiderations in social situations, they do not agree on justice’s role in shaping behaviour.2According to Greenberg and Cohen (1982), models of justice can be distinguished on thebasis of whether they espouse ‘instrumental’ or ‘normative’ roles for justice concerns.According to the normative approach, prevailing social practice dictates which behavioursare appropriate and just. In contrast, the instrumental approach suggests that people behavejustly to facilitate the attainment of other goals.Both the instrumental and the normative approaches suggest that justice considerationsare not ends in themselves, but means for other ends, albeit very different ends in the twocases. The instrumental approach suggests that people behave fairly when it is profitable forthem, i.e., people are motivated primarily by a desire to maximize their outcomes. Thenormative approach suggests that the rules of distribution serve a functional purpose for thesocial unit as a whole, and that society sanctions individuals who act unjustly. For example,the desire for functional distributions suggests that people use the equity rule whenproductivity is the goal for a social unit and that they use the equality rule when solidarityis the goal (Deutsch, 1975). Both models suggest that people know which rule is appropriatein a given situation and that they tend to adopt the profitable or the acceptable alternative.Simple hedonism or adherence to group norms are expected, both by the models and by mostpeople, to determine individual behaviour. Whatever their differences, the instrumental andnormative approaches begin with the assumption that justice, as a social device, is generatedin the course of people’s using their inteffigence to gratify their appetites (Lerner, 1981).Lerner (1977, 1981) suggests that neither the normative nor the instrumental model(he calls them both instrumental approaches) explain why justice plays a central role in ourculture and in many people’s lives. According to his justice motive theory, rather than being3an instrumental device to facilitate the acquisition of desired resources, justice acts as a guidefor assessing what ‘resources’ are desirable (Lerner, 1981). More directly, Lerner (1977,23) says “(justice motive theory) assumes a preeminent guiding principle or motive in thecommitment to deserving which serves to organize most goal seeking behaviour.” Hisbasic idea is that people are committed to the idea that everyone (including oneself) shouldalways get what they deserve: hence the term ‘commitment to deserving’. According toLerner this commitment to deserving is a fundamental human principle, and people behaveaccording to its dictates. In Lerner’s model the commitment to deserving (or justice) is theunderlying motive for human behaviour.For Lerner, justice serves as a goal or end state, by itself. This directly contrastswith the more prevalent conceptualization of justice as a strategy to achieve other goals (theinstrumental and normative approaches). The research presented here is pointed towardunderstanding which of the two aspects of justice (i.e., as a goal or as a strategy) determinespeople’s behaviour. It is important to note that the two aspects of justice are mutuallyexclusive by definition: if people behave justly to achieve other ends (i.e., justice as astrategy), then justice does not serve as a goal and if justice is a goal, then it is not a meansto achieve other ends.Researchers also disagree on the content of the justice motive. Specifically, theysuggest that the ‘desire for justice’ and the ‘desire to avoid injustice’ are two distinctmotivators (Greenberg, 1980). But little if any research has pursued this distinction.According to Hogan’s (Hogan, Johnson and Emler, 1978 and Hogan and Emler, 1981)theory of retributive justice, people are more strongly motivated by a desire to punish those4who do not behave justly than they are by a desire to behave justly. This view is alsosupported by the research on norms. For instance, Lemert (1951) says, that ‘On the wholepeople are aware of norms only when they are breached, and only projectively, that is,people discuss the action of others after it takes place, from the standpoint of its specificappropriateness and what ‘ought to have been done’ in the situation... Conformities tosocietal requirements pass without notice or comment but not so with deviations whichintrude upon the consciousness of those who are witnessed to them.’ If we view the justicenorm as being thoroughly internalized, then people will be concerned about justice only whenan injustice is perceived to have occurred (c.f. Utne and Kidd, 1980 for a similar discussionabout the salience of inequity in situations). It is not a proactive concern for justice, but areaction to perceived injustice that motivates behaviour. This also suggests that the desireto avoid injustice and the desire to achieve justice asymmetrically influence behaviour.Questions about the motivational bases (goal or strategy) and the content (justice orinjustice) of justice began at least as far back as the ancient Greeks. Plato questioned thejustice motive in humans and suggested that people would try to get away with injustice andwould behave fairly (and express a concern for justice) only to acquire a reputation whichthey could exploit for their own ends. In more recent times, Greenberg (1990) presented animpression management explanation for seemingly just behaviours. Impression managementtheories begin with the idea that behaviours can be explained on the basis of theircontribution to the material benefit of the person enacting the behaviour. The implicationis that people behave in a fair manner if it is in their best interest to do so, affirming theprimacy of self interest as a motivator and the use of fairness as a strategy.5Greenberg’s position is in contrast to theories that treat the desire for justice as amotive in its own right. For example, procedural justice theories posit non-instrumentalbases for justice concerns (e.g., Folger, 1993 and Tyler, 1993). Similarly Leventhal (1980)argues that the concern for justice is not an epiphenomenon that can be stripped away ordiscarded by reduction to supposedly more basic motives.While there is substantial empirical evidence that suggests that people behave fairlyonly if it benefits them (e.g., Greenberg and Leventhal, 1976 and Morse, Gruzen and Reis1976), there is equally impressive evidence that suggests that people behave fairly even whenit is against their self-interest (e.g., Kahneman, Knetsch and Thaler, 1985, Guth and Teitz,1990). One way of resolving these seemingly contradictory findings is to suggest that someindividuals focus on being treated fairly, and others focus on using fairness instrumentally.Another possibility, suggested by Leventhal (1980), is that theories and empiricalinvestigations ofjustice do not take into account the possibility that concerns for fairness maybe aroused in parallel with and produce effects superficially similar to those generated byother motivational forces. So the findings about the non-instrumental bases of fairbehaviours may just be a case of investigators paying inadequate attention to alternative selfinterest based explanations. But, Leventhal (1980) admits that there are situations wherepeople’s concerns for justice cannot be explained using the self-interest motive. Thus,questions about the importance of perceived fairness necessitate a clearer definition of thetheoretical boundaries of the analysis of fairness (Leventhal, 1980).This suggests that it may be useful to look at the features that distinguish situationswhere fair behaviours have been explained using self-interest motives from situations where6fair behaviours have not been so explained. The basic assumption of such an approachwould then be that certain features of interactional structures make the fairness motivedominant, and it is possible to identify them.A noteworthy difference characterizes studies that have found support for the strategicnature of just behaviours (e.g., the Reis, 1981, fmding that people follow justice rules tocreate favourable impressions) and those that support the notion that justice serves as a goal(e.g., the Guth and Teitz, 1990, fmding that people are willing to sacrifice their ownoutcomes to restore fairness): while the ‘justice as a strategy’ studies typically focus onallocators, those that suggest that justice is a desired goal typically focus on recipients ofallocations. This suggests that one of the structural, situational determinants of the justicemotive is a person’s role in allocation decisions: For an allocator the strategic motive maydominate, as a recipient one may seek justice as a goal.Similarly, research that attributes a justice motive typically focuses on allocators(e.g., Leventhal et al., 1972), while research that attributes an injustice avoidance motivefor human action typically focuses on recipients of allocations (e.g., Adams, 1965). Thisreinforces the notion that the role that people take in an exchange relationship determinestheir motives, i.e., as allocators they hope that behaving justly would lead to better outcomesfor the self and as recipients they hope to avoid injustice. Both the desire to avoid injusticeand the envisioned desire for justice could have either strategic or non-strategic bases. Weposit here, however, that while both may be instrumental, the desire for justice reflectsgreater instrumentality.People who have been shown to pursue justice for strategic reasons [i.e., allocators7in allocation experiments (e.g., Leventhal, Michaels and Sanford 1972) and managers inempirical tests of procedural justice models (Brockner et aL, 1990)] are also distinct fromthose for whom justice has been shown to be a goal [recipients in allocation experiments(Guth et al, 1982), employees in pay equity investigations etc.] : those who use justice forstrategic reasons tend to be more powerful than those who look for it as an end in itself (i.e.,as a goal). This suggests that power may be another structural determinant of the relativesalience of the two motives. Specifically, powerful actors may exhibit fair behaviours onlywhen they facilitate attainment of desirable outcomes, while those without power expressgenuine concerns for fairness and are willing to sacrifice desirable outcomes in their pursuitof justice. This suggests a model where the two types of fairness concerns- to appear andto be fair- can occur within the same individual and depends on the individuals’ structuralpower in any given situation.Similarly, an argument can be made that the content of the motivation for powerfulactors is justice and the content for the powerless is injustice. Hogan and Emler (1981 p.141) argue that ‘distributive justice is the unique concern of the power holders, especiallythose who wish to be regarded as just, fairminded, and equitable’. Further, Hogan andEmler (1981, p. 129) say that those without power are primarily interested in getting theirfair share and are interested in distributions only as a way to evaluate the power-holders’performance in their job. This suggests that the powerless would only react to a perceivedinjustice, and are thus motivated by a desire to avoid injustice rather than to do justice.The simple truism that justice motivates behaviour is clearly open to empiricalinvestigation, particularly when and how justice (or injustice) motives influence behaviour,8and what constitutes its limiting conditions. It is possible that Deutsch’s (1975) findings, thatdifferent situations evoke different justice rules, are true not only for rules, but also for theunderlying motives that drive justice itself. By removing the assumption that people aremotivated by a desire for justice, and treating such a concern as a variable that is uniquelydetermined by the nature and structure of each social interaction, we can determine whetherand how much people are motivated by fairness concerns and whether the structure of asocial situation affects people’s concerns for fairness.This position about the role of justice motives is echoed by Leventhal (1980), whoargues that writings in the tradition of social justice convey the impression that anindividual’s perception of justice is a powerful determinant of social behaviour when thetruth is that in many situations many individuals give little thought to questions of fairness.Leventhal (1980) suggests that a concern for justice is just one among many motivationalforces that influence social perception and behaviour, and it may often be a weaker forcethan others.There are a number of theoretical and practical reasons for resolving the contradictorystatements about the motivational status of justice. On the one hand, theories that emphasizeits strategic instrumental basis would have difficulty explaining fmdings that show that peoplebehave fairly and are concerned about fairness even when it is not in their best interests todo so. On the other hand, theories that emphasize that justice considerations are afundamental human motive would have difficulty explaining findings that show that peoplecheat when they can get away with it. A broader theoretical framework may be needed toexplain these inconsistent observations. Both sets of assumptions-- people see justice as an9end in itself and people see justice as the means to other ends -- may be explanatory for thesame individual, depending on the situation. This would imply that all of these theories maybe right, but they are limited in their generalizability.Another contribution of the framework that we propose is that it explicitly includespower. Though most justice researchers recognize the importance of power in justiceperceptions and judgments, power does not figure prominently in justice models. Powerhas traditionally entered discussions about justice only as the ability of different parties toa dispute to enforce the acceptance of a particular justice norm (e.g., Martin, 1993).According to Cook and Hegtved (1986) “there is a curious omission of the topic ‘power’ inmuch of the research on equity and distributive justice” and this omission is particularlyglaring because one of the principal founders of the field (Homans, 1976) said “ I believepower to be the most primitive phenomenon that lies behind distributive justice.”A comprehensive model would be useful both practically and theoretically innegotiation and bargaining. For some time, researchers (e.g., Bazerman, 1993) havecommented on the tremendous inefficiencies that arise as a result of disagreements duringnegotiations. One strong reason for disagreement is that people are concerned about‘fairness’ and would rather lose material benefits than agree to an ‘unfair’ settlement(Lowenstein and Thompson, 1990). Another reason for disagreements is that people do notput themselves in the shoes of the other party in the negotiation (Bazerman and Carroll,1987). Together, these reasons suggest that strategically, people should expect others to takefairness issues into account: understanding when and how fairness is important to the otherparty may be critical information in formulating negotiation strategies.10Lamm (1986) suggests that interpersonal conffict will be difficult to resolve when itis based on morally motivated justice considerations. He suggests (p. 60) that when two ormore confficting parties are motivated by genuine moral concerns, and they disagree onwhich justice principle is applicable in their particular situation, the conflict and its negativeeffects may be particularly intense. This suggests that it is important to know bargainers’motivational bases (i.e., strategic/instrumental or a goal), because misattributions may resultin treating a genuine concern for justice as a strategic act, thereby engendering negativeaffect and costly disagreements.Vidmar (1981) raises another practical reason for studying justice motives. Based onhis observation of disputes in small claims courts, he posits that different dispute resolutionprocesses i.e., adjudication, arbitration, and mediation, are differentially effective insatisfying disputants with different motives. Though he agrees that the type of motives willbe correlated only imperfectly with legal and sociocultural variables, Vidmar (1981. p 407)says that, ‘it is essential to understand what motives have caused the parties to carry theirconffict into a resolution forum before we begin to estimate what type of resolutionprocedure may be preferable or more effective.’ Thus, an understanding of people’s motivesin particular conflicts will help us to predict their choices of dispute resolution forums andalso their satisfaction with the chosen procedure.11CHAPTER 2.FRAMEWORK TO DISTINGUISH BETWEEN GOALS AND STRATEGIESResearch on fairness has been typically guided by the question of ‘which normwhen?’ (Greenberg and Cohen, 1982). To enhance our understanding of the role that justiceplays in social behaviour, a different line of investigation might try to identify ‘which motivewhen’. To be effective, this approach must assess justice motives on an a priori basis ratherthan inferring them post hoc; it would also have to determine the conditions under whichvarious justice motivations are salient (Greenberg and Cohen, 1982). To assess the relativeimportance of justice as a goal and justice as a strategy as motivators, we must have ameasurement procedure that permits both the identification of and the discrimination betweenjustice as a motive and justice as a strategy.Three approaches that provide us with the tools necessary to discriminate betweenmotives are the research on social motivation (McClintock, 1972), impression managementtheories (e.g. Reis and Gruzen, 1976), and bargaining experiments (e.g. Straub andMumighan, 1995).I. DISTINGUISHING BETWEEN MOTIVES.Van Avermaet, McClintock and Moskowitz (1978) outlined a strategy to distinguishbetween equity as a goal and equity as a strategy. They suggest that if equity is a goal,individuals would behave equitably across settings of interdependence. Also, this predictionshould hold regardless of whether equitable choices are consistent or inconsistent with12absolute or relative gain motivations. If equity is a goal for people, they will selectoutcomes to self and other that are most equitable even when the decision has no effect onothers’ future decisions (Van Avermaet et aL, 1978).In contrast, if equity is a strategy in the service of absolute or relative gain, onewould predict that equitable behaviour will occur only when the individual decision makersperceive that equitable behaviour is valuable or expected and they expect that their choiceswill be scrutinized by others who exert some control over their own future outcomes (VanAvermaet et al., 1978). If behaviour is not consistently equitable- it changes depending onits value the behaviour can be assumed to be under the direct control of an own or relativegain maximization motive, i.e., a strategy. Leventhal (1980) makes a similar argument todistinguish between fairness and what he calls quasi fairness.Van Avermaet et al (1978) see the presence or absence of an experimenter,anonymity and the relationship between the two people in the exchange relationship as someof the variables that affect a persons’ perception of a situation as one calling for equitablebehaviour. They argue that by systematically varying these factors and studying behaviouracross these variations, one can infer whether equity is a goal or an interpersonal strategy.If we substitute the word ‘justice’ for the word ‘equity’ in the Van Avermaet et al.,conceptualization, then we have a basis for discriminating between justice as a goal andjustice as a strategy.The variables identified by Van Avermaet et al., (1978) are also those studied byresearchers in the impression management tradition. Researchers on bargaining games studyinformation asymmetry as a means to distinguish between justice and self-interest motives13(e.g. Straub and Murnighan, 1995). Finally, the idea that outcome interdependence iscrucial for distinguishing goals from strategy is the basis for many studies in the socialmotivation theory tradition. We thus draw on these traditions to formulate methods fordiscriminating between motives by observing behaviour.i. Social Motivation. The research on social values (e.g. Messick and McClintock,1968) provides a useful starting point for discriminating underlying motives in resourceallocation processes. According to McClintock and Van Avermaet (1982), social values canbe assessed by ascertaining an actor’s choices between their own and other’s outcomes, invarious distributions.Early attempts to assess social values generally involved observing actors makechoices in two-person, two-choice matrix games, that is, in games where on any given trial,the actors outcomes were determined by both their own as well as others outcomes(McClintock and Van Avermaet, 1982). Messick and McClintock (1968) identified threevalue orientations-- cooperation, individualism and competition-- that may underlie actors’choices in game settings: they generated six possible game classes which placed the valuesin conflict with each other. By malcing people play these six classes of games repeatedly,they suggested that an observer could infer the players’ predisposition toward cooperation,individualism or competitionSocial value researchers distinguish between social values as goals or as interpersonalstrategies (e.g. Messick and McClintock, 1968). They suggest that using decomposed games(i.e., a game in which a player is given a choice between two alternatives, each of which14specifies the payoffs to the player and the simulated other) reduces the joint interdependencebetween actors since choosers can completely determine both their and their counterparts’outcomes and lessens the opporti.mity to make choices for the strategic reason of modifyingother’s behaviour. Many empirical tests of social values have used decomposed games andriskless choices, where outcomes do not depend on the other’s acceptance or rejection.McClintock and his colleagues (e.g., McClintock and Van Avermaet, 1982, McClintock andKeil, 1982 etc.) have extended their theory of social values to the study of justice byshowing that the rules of fairness (e.g., equity and equality) are themselves social values,and hence the framework could distinguish between and identify people’s predisposition toadopt a particular rule.The idea that decomposed games assess values (justice) as goals because theyminimize the need for the use of values (justice) as strategies suggests that comparing thesegames with regular two-person, two-choice matrix games might reveal whether values(justice) are used strategically. Extending Van Avermaet et al. ‘s (1978) argument (that ifequity were a socially valued goal as opposed to an interpersonal strategy, then it would befollowed regardless of situational factors), we suggest that if justice were a goal and not astrategy then there should be no difference in behaviour in interactive and decomposedgames. Stable just behaviour, irrespective of the level of interdependence in the relationshipwould indicate that justice is an end in itself; just behaviours in the case of highinterdependence only would suggest that justice is used as an interpersonal strategy.We now turn to a brief review of the impression management literature.15ii. Impression Management. Researchers from the impression management traditionhave also distinguished between motives using various methods, including anonymityconditions and manipulation of self-awareness and the salience of fairness.Different subject anonymity conditions. Subjects’ allocation decisions when bothrecipients and experimenters know their identities are compared to allocation decisions whenonly the experimenter knows their identity and to allocations made under total anonymity.The difference in allocation behaviours is attributed to the impression management objectives(motives) of allocators. The logic is that behaviours designed to impress others would occuronly when people believe that others can observe them (Tetlock and Manstead, 1985). Someexamples of such experiments include those by Morse, Gruzen and Reis (1976) and Lane andMesse (1971). Morse et al., (1976) asked participants to perform a computer-check codingtask in the presence of an experimenter, in the absence of an experimenter but where theywere asked to leave a note indicating how much work they had done (suggesting that theirperformance could be evaluated later), and in the absence of an experimenter and wherethere was no possibility that their performance could be evaluated. Participants finished lesscoding with more errors in the condition where the experimenter was not present and theirperformance could not be evaluated than in the other two conditions. Lane and Messe(1976) found similar effects in allocation situations, but in their experiment the person whowas or was not aware of the participant behaviour was the recipient in the allocationsituation. Participants allocated less money to recipients when they were told that therecipient would not know who made the allocation as opposed to conditions where they weretold that they would be introduced to the recipient. Thus, anonymity from the experimenter16and other participants (especially those who are affected by participants’ behaviour) hadstrong effects on behaviour, suggesting that people were trying to manage others’impressions of them.Raising the salience of fairness. Impression management motives are alsodistinguished by studying peoples’ decisions when the issue of fairness has been madeexperimentally salient and contrasting these decisions with decisions made in conditionswhere fairness is not made salient. Fairness salience is typically raised by makingparticipants believe that an audience who will learn of their decisions either prefer fairnessor do not prefer fairness. The audience can be the experimenter. For example, Mikula(1973, referenced in Reis 1981), asked participants to make just allocations and allocationsthat gave them satisfaction. Participants made larger allocations to others when given justiceinstructions, presumably because they believed that their audience (the experimenter) valuedjustice.Raising self awareness. People become more self aware when they must confronttheir own reflection in a mirror (Greenberg, 1990). The theory of objective self awareness(Duval and Wickland, 1972) states that self focused attention heightens self criticaljudgements. As a result people become more aware of the discrepancies between their ownbehaviour and ideal standards (Greenberg, 1990). Results show that people who are placedin front of mirrors behave more equitably than those who are not placed in front of mirrors(e.g., Reis and Burn, 1982).ffl. Information Asymmetry. Some scholars have argued recently that by comparing17behaviour in asymmetric information conditions with behaviour in information symmetricconditions, we can identity the underlying motives of behaviours (Straub and Murnighan,1995). Specifically, they suggest that if people use an information advantage to obtain betteroutcomes for themselves, then the salient underlying motive is self-interest rather than trueconcerns for fairness. In their experiment, Straub and Murnighan found that participantswho were asked to divide a sum of money between themselves and recipients, offered moremoney to recipients when the recipients knew the amount that the offerer was dividing, thanwhen the recipients did not have this information.All these approaches suggest people are instrumental and strategic when they arepowerful actors and that justice may not be their goal. They also show that, to distinguishbetween instrumental and actual motives for fair behaviour, an empirical examination mightsystematically vary the degree of interdependence between two parties in an exchange.Ultimatum and dictatorship games provide such contexts. As will be clear in the followingdiscussion of the two games, outcome interdependence is high in ultimatum games and lowin dictator games. By systematically varying the salience of fairness in the exchangesituation and creating differing levels of information asymmetry, this investigation alsoprovides a broad set of experimental conditions for assessing the presence of different typesof justice motives.II. ULTIMATUM AN]) DICTATORSHIP GAMES.Ultimatums are a basic element in the endgame of negotiations (and otherinterpersonal interactions that have competitive elements). In an ultimatum game, one party18is the offerer and the other is the respondent. In most experimental research on ultimatums,the offerer controls a specific amount of money (e.g., $10) and must offer some portion ofit (say, $3) to the respondent, who can either accept or reject the offer. Both players knowthe amount being divided and the simple rules for their negotiation. An acceptance leads tothe respondent receiving the offered amount ($3) and the offerer receiving the rest ($7). Arejection means that both players receive nothing. The offerer in this game has tremendouspower: once the offer has been made, it cannot be changed, and the respondent can onlyaccept or reject it.Early empirical investigation of ultimatum bargaining tested the predictions of gametheory’s models of subgame perfect equilibrium (Selten, 1965) which analyze ultimatumgames from the respondent’s perspective, at the end of the game, and work backward to thebeginning. Since something is better than nothing, the respondent should accept almost anyoffer, even if it is very small. In turn, offerers should make extremely small ultimatumoffers-- and these should be accepted. Early results found larger than minimal offers andsome rejections of offers, counter to theoretical prediction. Guth, Schmittberger andSchwarze (1982) attributed the results to fairness concerns. More recently considerabletheoretical and empirical controversy has arisen around whether genuine concerns forfairness or strategic considerations explain the results (e.g., Straub and Murnighan, 1994).To test whether observed ultimatum offers were due to a true desire to be fair, orwhether they were an interpersonal strategy aimed at reducing the likelihood that respondentswould reject offers, Forsythe et. al. (1994) modified the ultimatum game to eliminate thedependence of the offerer on the respondent and called these games dictatorship games. In19the dictatorship game an offerer divided an initial endowment and his/her payoff (the initialendowment less the offer) did not depend on the respondents’ acceptance: even a rejectionresulted in offerers getting what they asked for.We differentiate between ultimatum and dictatorship games on the basis of theirinterdependence: dictator games are to ultimatum games as decomposed games are tostrategic interactions. As noted earlier, Messick and McClintock (1968) suggested thatdecomposed forms of two-person, two-choice games, measure goals as opposed to strategiesbecause outcome interdependence is reduced in the decomposed games.’ Dictator andultimatum games may be better equipped than two-person, two-choice games and theirdecomposed counterparts to discriminate between the instrumental and moral bases ofjusticemotives because there is no outcome interdependence at all in dictator games: some outcomeinterdependence remains in decomposed games.Since offerers get their outcome without the necessity of a respondent’s agreementin a dictator game it models the decomposed game. The ultimatum game requires that therespondent agree to the offerer’s proposal before the offerer gets any outcome. There is noneed for offerers to behave fairly for strategic purposes in dictator games, since rejection bythe respondent does not affect the offerer’s outcome. In ultimatum games, however, offerersmust take into account the possibility of rejection by the respondents. Adopting VanAvermaet et al’s. (1978) distinction between justice as a goal, and justice as an interpersonalstrategy, any difference in the size of offers between dictatorship and ultimatum games wouldindicate that offerers are using justice as an interpersonal strategy.These games also permit us to study the effects of various power levels (the offerer20in dictatorship games is more powerful than the offerer in the ultimatum games) and theactions of allocators (offerers) and recipients (respondents). We do not study the case wherethe allocator has no power and the recipient has all the power because such cases may belogically impossible (and rarely occur in real life). This may lead to the question that if therole as allocator or recipient determines one’s situational power, then there is no need forpower as an independent explanatory variable. But the two games with differing levels ofinterdependence allow power levels within the role of allocator to be varied independent ofthe role, as dictator- allocators have more power than ultimatum allocators. [ Note thatpower as defined here is inversely proportional to dependence: A definition consistent withEmerson (1964), Cook and Hegtved (1986), Deutsch (1982) etc.]In addition to providing a context for discriminating between the goal oriented andstrategic aspects of justice, ultimatum and dictator game behaviours are of interest in theirown right. Thus, this study uses past research on justice in exchange situations that suggeststhat allocators (or people with power) are concerned about the strategic use of justice whilerecipients seek to avoid injustice to explain behaviour in ultimatum and dictatorship games.By doing so it also attempts to address a recent controversy in experimental economicsconcerning whether justice and fairness concerns explain large ultimatum offers and rejectionof small ultimatum offers.21CHAPTER 3..1USTICE MOTIVES: THE EFFECTS OF ROLES AND POWER.The study of justice has generated a number of classificatory schemes. Greenbergand Cohen (1982), distinguished between normative and instrumental theories of justice.McClintock and Van Avermaet (1982) based their typology on whether rules of fairness weregoals, accommodative strategies or social norms. Greenberg (1982) organized theories ofjustice according to their underlying assumptions of human motivation: with the reactiveapproach, behaviour is motivated by an attempt to escape from or avoid inequitableconditions: with the proactive approach, behaviour is motivated by attempts to activelysecure or approach equitable conditions. Greenberg (1987) organized theories of justicebased on whether they emphasized the process, i.e., the procedural or the distributive aspectsof justice. We adopt two dimensions to organize the literature: The strategy/goal dimensionto depict the underlying motives and the justice/injustice dimension to depict the content ofthe motives. These dimensions have been chosen for the following reasons: The focus ofthis study (i.e., to distinguish justice behaviours motivated by strategic considerations fromthose enacted to achieve the goal of justice) requires that we compare and contrast studiesespousing the strategic aspects of justice from those that emphasize the goal aspect.Similarly, the argument that ‘justice’ and ‘injustice’ are separate motivators and not simplynegatives of each other (Hogan and Emler, 1981) suggests that a systematic evaluation oftheories which give ‘justice’ or ‘injustice’ a preeminent position in human motivation wouldreveal the boundary conditions within which each of these motives operate.22Crossing the two dimensions results in four cells. Most extant theories of justice fallin the injustice (avoidance) as a goal cell or justice as a strategy cell. We also group justicemodels on the basis of whether the focus of their theoretical and empirical investigations areallocators or recipients. (See figure 1).We restrict the following review to only those approaches that directly refer to therole of justice concerns in actual individual behaviour.I. (AVOIDANCE OF INJUSTICE AS A GOAL.These theories assume that people are motivated by a desire to avoid injustice.Equity theory (Adams, 1963 and 1965), on the one hand, says little about ‘justice’ exceptto use the concept to identify inequitable states and people’s reactions to inequity. On theother hand, the model of retributive justice (Hogan and Emler, 1981) suggests that justiceplays little or no role at all in human behaviour and that people are motivated by a desire toavoid experiencing or doing injustice. Similarity in the assumptions about the moral role ofinjustice (i.e., seeking to end injustice as an end in itself) logically places the two models inthis category. Distributive justice theory (Homans, 1961) and status value theory (Bergeret al. 1982) are also among the theories that focus on avoiding injustice as a goal.i. Distributive Justice Theory. Homans (1961; 1974) proposed that in an exchangerelationship people form expectations about the rewards that they deserve. Violations ofthese expectations lead people to perceive injustice and feel anger toward, ‘the source orbeneficiary of the injustice’ (Homans, 1974, p. 257). Expectations are expected to be23determined by equity considerations, i.e., the rule of proportionality will be followed, andeach person’s rewards are commensurate with their investments. While disagreements arelikely over what constitutes investments and how much each party in the exchangerelationship has contributed (in terms of the identified investments), disagreements over therule of proportionality are assumed to be rare (Homans, 1974).Thus, Homans suggests that people look for justice, and in its absence react withanger and aggression toward the perpetrator of the injustice when the beneficiary is theallocator and toward the beneficiary in the case of third party allocation. Later researchers(e.g., Leventhal) extended Homans’ work to include allocation decisions, but the originaltheoretical statement clearly identified the absence of justice as a motivator.ii. Equity Theory. Adams’ (1963) work explains the causes and consequences ofthe absence of equity in human exchange. The purpose of his 1963 paper, in his own words,was (p.422) ‘... to present a theory of inequity, leading toward and understanding thephenomenon and, hopefully resulting in its control.’ Adams’ theory was a special case ofcognitive dissonance theory (1963, p.422), and was stimulated by Homans (1961) work ondistributive justice. The theory is set within the context of an exchange, whether theexchange is between husband and wife, football teammates, teacher and student, or even,people and God (Adams, 1963 p.422).The key concepts in the theory are inputs, defined as what a person perceives to behis/her contribution to an exchange, and outcomes, defined as an individual’s perceivedrewards from the exchange. The key factor in the definition of inputs and outcomes are that24they are the perceptions of the focal actor and need not correspond with the perceptions ofother actors in or observers of the exchange. Further, Adams (1963, p.4Z3) suggests thatclassifying variables as inputs or outcomes does not imply their independence (exceptconceptually).People compare the ratios of their inputs and outcomes with the ratios of similarothers: The other could be a person with whom the focal person is in a direct exchange, ora co-recipient where the allocator is a third party. When the ratios are equal, equityprevails; when they are not, inequity results and people strive to reduce it. Adams identifiednine possible measures that people can adopt to reduce perceived inequity (1963, p.427-429):increase or decrease their inputs, increase or decrease their outcomes, leave the field,psychologically distort their or others’ outcomes/inputs, force them to leave the field, orchange their referent other.Most of the empirical work that followed Adams’ theoretical statement about thenature and consequence of inequity focused on creating inequitable situations and studyinghow people altered their inputs to avoid the inequity. Although a considerable number ofstudies support the models’ predictions, it has also been the target of much conceptualdebate. Very little of this controversy however disagrees with equity theory’s basicassumption that perceived inequity will generate a motivation to restore equity.lii. Status Value Theory. Berger et al (1972) suggested that a major problem withequity theory was that it could not distinguish between: 1) over and under reward, 2)individual and collective injustice, or 3) an unjust outcome for self and an unjust outcome25for the other. They argued that local comparisons did not result in inequity and postulatedthat people use a stable referential structure to judge the fairness of their rewards [e.g., Aprofessor in a law school usually compares herself with people in the legal and academicprofessions). Local comparisons result in ‘anomie’ while comparison to the referentialstructure result in perceptions of justice or injustice. According to Berger et al. (1972, p,133), a referential structure has the following four components: a) Generalized individuals,b) who possess given states of given characteristics, c) to which are associated given statesof given goal objects, d) where the characteristics and goal-objects are all status-valued.Examples of ‘generalized individuals’ are airline mechanic, professor of law, etc.,as opposed to a particular Mr. Smith or Dr. Jones. A ‘characteristic’ is any feature oraspect of a person that can be used to describe him/her, such as height, education, etc. A‘goal object’ is anything tangible that a person may want, or that may satisfy some need,such as shelter, income, or a title. A state of a characteristic, say education, may be highor low; a state of a goal-object, say income, may be big or small. State is different fromstatus value in that the status value evaluates whether the state is good or bad. Thus, in agiven situation, a person may see high education as a positive and someone else mightevaluate it as a negative.Berger et al (1972, p. 144-145) summarize their theory as follows, “In the theory ofstatus value, comparisons are formulated in terms of referential structures. A distinction ismade between particular social objects such as the actor himself or other actors with whomhe interacts, and generalized objects of orientation, of whom an actor holds stereotyped,unitary conceptions. Among other things, referential structures contain information about26rewards, or more exactly, goal objects, typically associated with generalized objects.Referential structures determine, first, the status significance of characteristics and goal-objects possessed by particular actors, and second, the expectations actors come to holdabout the manner in which goal objects may legitimately be allocated. In the context of thestatus significance and normative expectations created by the referential structure, actualallocations either coincide with expectations or do not. Those that coincide with expectationsare defined as just; those that do not are unjust. A state ofjustice is always a balanced statussituation, while injustice is always an imbalanced status situation. Balanced status situationsare stable, imbalanced status situations produce tensions and pressures for change.”Though the focus of this stream of research is the selection of the relevant comparisonstandard, the model assumes, like equity theory, that people are motivated by a desire toavoid injustice. An important difference from Adams’ equity theory is that it is moregeneral and assumes that people react negatively when either their own or others’ rankingsof various status dimensions are dissimilar.iv. Retributive Justice Theory. Hogan and Emler (1981, p. 131) argue that theoriesthat emphasize the positive side of justice processes (i.e., on allocating and exchangingbenefits on a just basis) ignore the older, more primitive, and socially more significantprocess of retribution. According to this theory, people do not behave justly because theybenefit by it, or because they have a genuine concern for justice. They do so because theywould like to avoid the social sanctions which result from behaving unjustly.Hogan and Emler support their position by arguing first that while society is slow in27rewarding conformity to social rules, it is quick to punish deviance. Second, there areelaborate and institutionalized social mechanisms to deal with inequity and injustice, but nocomparable mechanism exists to reward justice. Third, even in the administration ofjustice,while the wrong doer is punished, the victim is rarely compensated, therefore makingretributive justice even more salient.While Hogan and Emler (1981, p.131) argue that “retribution is not a ‘natural’concept like sympathy, jealousy, or aggression; that there is no reason to believe that itssources are rooted in human biology”. They also make it clear that they think that (p. 136)“calculations of self-interest strike us as too cool to explain the passion with which peoplereact to perceptions of injustice”. Instead Hogan and Emler (1981, p.136) present retributionas non instrumental, “perceptions of injustice (defined as other’s getting more than their fairshare, or not getting their just desserts after misbehaving) are followed by aggressivereactions that may serve one’s selfish best interests but are prompted by considerationsof self-interest.”All of these theories -distributive justice, equity, status value and rethbutive justicetheory- are primarily concerned with people’s reactions to injustice. An implicit assumption(and in some cases, Hogan and Emler’s case, an explicit statement) is that people aremotivated by a desire to avoid injustice. These theories do not suggest that the primarymotivation is self-interest. According to equity theory (Adams, 1965), people are motivatedto resist inequity even if the inequity is to their benefit e.g., in the case of overcompensation.These theories suggest that avoiding injustice is not used as an instrumental measure forother ends.28Most of these theories have been empirically tested in situations where the observedparticipants were recipients of allocation decisions, suggesting that these theories implicitlyaddress the recipient rather than the offerer side of exchange interactions.II. INJUSTICE AS A STRATEGY.Models describing injustice as a strategy are infrequently studied and are not ofcentral interest in this project. Technically theories that view injustice as a strategy covertwo broad classes: Those that suggest that people react to injustice because it serves theirself-interest to do so and those that suggest that injustice can be used as a strategy tomotivate people.i. (Avoidance of) Injustice. In this case, the goal-strategy distinction is not easilyidentified, especially in cases of disadvantageous injustice, because any action to restorejustice by a recipient who is the target of an unjust allocation decision is consistent with theself-interest motive. The idea that people object to bad outcomes is consistent with thenotion of outcome maximization, which is almost axiomatic in most economic models ofhumans, but the difficulty is determining whether their objections are either principled orstrategic. Economic theories that emphasize the value of reputation (e.g., Frank, 1988), andevolutionary fitness (e.g., Skyrms, 1993) suggest that people avoid injustice because it is intheir long term interest to do so. Specifically, Frank (1988) argues that if people losecurrent rewards by reacting to injustice, it may be beneficial to them in the long run: peoplewill not take advantage of them because their past behaviour indicates that they are not29willing to put up with injustice. Thus, by giving up some current benefits, people may beable to increase the likelihood that they will get fair treatment later.In the case of overcompensation, it is possible to distinguish between the goal andstrategic aspect of a behavioral reaction to perceived injustice. Rivera and Tedeschi (1976)studied people who were overcompensated (i.e., an advantageous inequity situation):Participants were first asked to rate their satisfaction with the allocation. Overcompensatedparticipants reported feelings of guilt and dissatisfaction. Then, they were told that theywould be hooked up to a lie detector and had to report their true feelings. In the presenceof the lie detector (i.e., the bogus pipeline procedure), participants reported less guilt anddissatisfaction than when a lie detector was absent. Rivera and Tedeschi concluded thatparticipants reported guilt when they were overpaid because it was normatively appropriateto do so, but when forced to tell the truth, they revealed that they were actually pleased tobe overpaid. These results suggest that overpaid recipients express a reaction toadvantageous injustice only because it is expected, and not because of any genuine desire toavoid injustice.Other models also state explicitly that creating injustice (for others) can lead to betteroutcomes (for self).ii. Overreward as a Motivator. Leventhal (1976) suggested that people may use thetactic of providing others with greater outcomes than they might ordinarily expect (i.e.,create injustice for instrumental purposes) to create obligations on the part of poorperformers to reciprocate allocators’ generosity by improving their subsequent performance.30This was demonstrated empirically in Greenberg and Leventhal (1976) where participantswho were given explicit instructions to allocate rewards to motivate recipients tended toover-reward poor performers compared to participants who had been given instructions toallocate rewards equitably. A follow up questionnaire revealed that this was because subjectsbelieved that over-reward was a better motivator than under-reward.According to Greenberg (1982), this tactic would only work for short term goals,because over time people’s aspiration levels may rise to keep up with the overreward. Also,others may begin to suspect that the overreward is deliberate and react unfavourably to whatthey perceive to be a manipulative tactic. Further, people tend to use inequity as amotivational tactic only for poor performers (i.e., people do not under-reward goodperformance). Finally Greenberg (1982) suggests that allocators may refrain from overrewarding a worker if they fear repercussions from others. People who compare themselveswith overrewarded workers might begin to feel inequitably paid.An important point here is that the perpetrator of injustice (e.g., the allocator) ismotivated by strategic considerations, but the technique (of injustice as a motivator) onlyworks if the target of the injustice (the recipient) is motivated by a desire to avoid injusticeas a goal rather than for strategic reasons. If the targets are motivated only by instrumentalconcerns, then they would not react to advantageous injustice by working more or byincreasing inputs. Instead they would reap the over-reward and hope it continues.IILJUSTICE AS A GOAL.According to Lerner (1981) justice is a basic human motive and cannot be explained31away by suggesting that it is a strategically formulated social and personal device used tofacilitate the acquisition of other desired resources (Lerner, 1981). Lerner (1981, p. 22-23)stated his position directly: “the most important step in developing an adequate theory ofjustice is to recognize that the traditional assumption that people are continually and centrallyconcerned with the process of maximizing their outcomes (call it drive reduction, or profitmaximizing, or pleasure enhancing, or pain avoidance) must inevitably lead to a model thatfails to capture the unique qualities associated with justice in human affairs.” His is theonly model that fits this category.i. Justice Motive Theory. According to Lerner (1981, p.21), “there is no doubt thatpeople wish to maintain a positive self-image and pursue their self-interest in the mosteffective manner; however what is also true is that these goals are framed within the moregeneral commitment to deserving and justice.” The justice motive theory assumes, alongwith all other approaches, that people are self-interested in the sense that they are born withand generate desires and goals. However, self-interested, outcome-maximization motivesare assumed to be radically altered very early in the developmental process (Lerner, 1981,p.27). This occurs because from very early in life children learn that by delayingimmediate gratification, they can assure themselves of greater rewards in the future. Also,they learn that the rule of deserving (i.e., everyone should get what they deserve) is the bestmechanism to ensure the stability and predictability of their own rewards. Note that evenLerner’s justice motive, at a very fundamental level, is also based on self-interest. But, thedifference is that it becomes an internalized principle that people use in all choice situations,32and does not vary according to context.Justice motive theory assumes that people organize their experience to maintaincontinuity and stability. Based in developmental psychology, the theory suggests that peoplelearn to make sense of their interactions by organizing them along two dimensions: thesimilarity of others (the relation component) and the interdependence of the acquisitionprocess. In encounters with others, people attend to and process cues of who they are interms of ‘same’, ‘similar’, or ‘different’ (termed the relational element), as well as the kindsof activities required to accomplish their goals (termed the acquisition process) i.e., peoplemust either experience their goals vicariously through the other, or have convergent goals,or have divergent goals requiring competitive acts (Lerner, 1981). In any situation, eitherthe relational element or the acquisition process is salient; to illustrate, consider the exampleof a work team where team members are in a unit relationship (i.e., they view each otheras being similar) and their goals are divergent. The relationship is salient when it isnecessary to maintain the perception of being in a unit relationship. When a limited resource(e.g., a promotion) is the focus, then the acquisition process becomes salient. Lerner (1981)suggests that people construct problem solving sets [i.e., a three by three matrix with thethree relational elements, same, similar, and different, crossed with the three acquisitionprocesses, vicarious, convergent, and divergent) as a template for action.Depending on which set of considerations is most important in a given situation (therelation to the others or the gaining of the resource), a person will perceive others andrespond to them within the problem solving set, viewing them in relatively impersonal termsas occupants of positions in an acquisition process (when the acquisition process is salient),33or as ‘kinds’ of people who merit certain kinds of outcomes regardless of the particularacquisition activity in which they happen to be engaged (when the relational element issalient) (Lerner, 1981). Thus, the repertoire of behaviours is not just the nine cells of thethree by three matrix: each cell is further divided into two depending on the relative salienceof the relational element and the acquisition process.The combination of the perceptions of relationships and acquisition processesdetermines what is fair and just in a given situation and determines how people act. Toillustrate, when others are perceived as similar and the two parties have divergent goals, fairbehaviour can be a formal contest for resources when the relational element is salient orbehaviour reflecting justified self-interest when the acquisition process is salient. Whenothers are perceived as similar and the goals are convergent, appropriate behaviour is teameffort and equal sharing of resources when the relational element is salient and cooperationand proportionate sharing of resources when the acquisition process is salient.According to Lerner, people behave according to what they consider to be appropriatebehaviour in any context, based on this template. The most important aspect of this theoryis that people are capable of viewing everyone as the ‘same’ (in doing so they are morelikely to behave in a fair manner). Economic and institutional arrangements minimize thistendency and promote self-interest as the dominant motive when, according to the model,altruism and cooperation are equally important motives.In sum, justice motive theory is the only model that suggests that people behave ina fair manner because justice is strictly a goal for them. Seemingly strategic behavioursoccur because people see these behaviours as fair. The theory explains seemingly strategic34behaviours within the frame of fairness, while other approaches explain seemingly fairbehaviours within the frame of self-interest.Most empirical studies of justice motive theory have focused on third party reactionsto allocation decisions. Lerner (1982) also suggests that allocators’ behaviours in otherexperiments (e.g., Leventhal, 1976) correspond with the predictions ofjustice motive theory.Thus, this theory implicitly addresses the allocators’ side of exchange interactions.IV. JUSTICE AS A STRATEGY.Models of justice as a strategy emphasize the normative (defined as rule followingbehaviour) and the instrumental (narrowly defined as the maximization of own outcomes)aspects ofjustice (e.g., Deutsch, 1975; Leventhal, 1976). Normative theories emphasize thatpeople behave fairly because of the existence of a norm (though they are instrumental to theextent that they include a functional purpose, for society or the social unit, and onlyindirectly for individuals, for fair behaviours), while instrumental theories suggest that self-interest (not adherence to a norm) is the direct motivator of fair behaviours. Though theinstrumental and normative models differ in their explanation of the basis of fair behaviours,they are similar to the extent that both assume that fair behaviours are not enacted due to adesire for justice by itself. According to the normative view, society has developed normsto ensure its own smooth functioning and people follow the norms because it benefits themin the long run if society functions smoothly. According to the instrumental view, peopleattempt to maximize their outcomes and behave in a manner (sometimes in an ostensibly justmanner) that helps them attain this goal.35Though impression management theory is not exactly a theory of justice, it has beenused to explain just behaviours (e.g., Reis, 1981), and thus falls within this domain.1. Normative Theories. Models of people following socially determined rules that areappropriate to their particular situation are defined as normative. They exemplify justice asa strategy category because they suggest that self or society maximization are normativelyappropriate (e.g., Deutsch, 1975). For instance, just behaviours are functional for thesociety, and if people do not follow them they are sanctioned. Thus, it is in the best interestof the individual that he/she follows the appropriate justice rule.a. Justice judgement theory. Leventhal (1976) suggests that the impact of anyallocation norm does not rest solely upon the allocators’s desire for justice as an end in itself,but also upon the predictability and expected benefits of a particular norm. Leventhalfocused on allocators and suggested that their justice judgements are based on what theyperceive to be appropriate distribution rules. These judgements do not necessarilycorrespond to actions or behaviours to create or remove injustice, because in some casesjustice may be inimical to the desire to increase productivity or stimulate performance andenhanced productivity and performance may be the preferred goal of the allocator. Forexample, Greenberg and Leventhal (1976) report an experiment where participants who weretold that their main goal was to motivate failing performers, displayed no concerns forfairness, and over-rewarded bad performance. Leventhal (1980) suggests that justiceconsiderations coexist with other more pragmatic considerations such as increasingproductivity, minimizing wastage of scarce resources, and preserving group harmony among36others, and the relative salience of these considerations is situation specific.Deutsch’s (1975) model is similar, except that he allows for a social motive inaddition to the individual desire to maximize outcomes, i.e., the social unit adopts aparticular rule because it is the intelligent way to solve a distribution problem. Thus, a unitwith the goal of economic productivity typically adopts the equity rule; a unit with goodinterpersonal relations as the goal generally adopts an equality rule.ii. Instrumental Theories. These theories also suggest that justice rules serve endsother than justice. For example, Walster et al., (1978) note that people “soon learn that themost profitable way to be selfish is to be fair”. In fact, according to Walster and Walster’s(1975) version of equity theory, people behave in a manner consistent with the maximizationof their outcomes, and if behaving equitably maximizes their outcomes, they do so.;ffl. Impression Management Theories. Impression management models have alsobeen introduced into justice research. Greenberg’s (1990) comprehensive review finds thatpeople adopt just behaviours for the sake of looking fair. Within this framework, people aremotivated by a desire to acquire a favourable reputation, so they behave fairly in publicsituations. But when they can cheat and get away with it, they do so.Impression management theorists distinguish between pragmatic and principledmotives behind impression management behaviours. Behaviours enacted to impress oneselfare termed principled and those that are enacted to impress others are termed pragmatic.According to Greenberg (1990) people behave fairly to maintain self-images as fair persons37(principled) or to convey an impression to others that they are fair (pragmatic). The modelsthat suggest pragmatic reasons for impression management are very similar to instrumentaltheories of justice in that they suggest that justice is not the goal, but a strategy adopted bypeople to acquire favourable reputations. A number of empirical studies have shown thatpeople allocate resources equally only when others (including recipients, observers,experimenters, etc.) are aware of their decisions (Reis and Gruzen, 1976), when they expectto meet the recipients (e.g., Austin and McGinn, 1975) and when the recipients are thosewhose impressions are valued (e.g., one’s spouse in Schoeinger and Wood, 1969, or one’sfriends in Austin, 1980). These results support the impression management implications ofjust behaviours.In some cases, conflict arises between internal standards of justice (i.e., principledself-image maintenance efforts) and the pressure to present oneself favourably to others(pragmatic). Kernis and Reis (1984) created such conflict and studied how an individualdifference variable (public or private self-consciousness) predicted justice behaviours. Theyhad participants allocate rewards after performing a task on which they were led to believethat they were more productive than others. They also emphasized that equality wasnormatively appropriate for the situation. Participants who followed the equity norm wouldbe trying to impress others that they were fair, while those who followed the equality normwould be trying to impress themselves that they were fair. The results indicated that highlyprivate, self-conscious participants followed the equality norm and the highly public, selfconscious participants followed the equity norm. Individual differences predicted whetherthe self or others would be the target of impression management.38Most impression management studies and models focus on allocators, although wehave noted in an earlier section that some studies have looked at recipients. Impressionmanagement studies have traditionally looked at cases where recipients are overcompensated.The models have not been used to study cases of disadvantageous injustice.Most theories of justice as a strategy have been empirically tested in situations wherethe observed participants were allocators in allocation decisions, therefore suggesting thatthese theories tend to address the allocation side of exchange situations. In studies ofrecipients, allocations are typically over- rather than undercompensations, which also putsrecipients in a relatively high status situation. These results may not generalize to cases ofperceived under-compensation (i.e., people expressing dissatisfaction with being under-compensated because it is normatively appropriate and not because they are genuinelyconcerned about it), which is arguably the more common case.Based on the above review, one or more of the following statements may be trueabout the content (justice or injustice) and nature (goal or strategy) of the motivation behindpeople’s behaviour. For clarity, we separate the statements that have been made about themotivations of allocators from those of recipients.Allocators:People allocate resources justly because it is in their best interest to do so. (Justiceas a strategy).People allocate resources unjustly because it is in their best interest to do so.39(Injustice as a strategy).People avoid unjust allocations, because it is in their best interest to do so. (Injusticeas a strategy).People allocate resources justly, because they care about justice. (Justice as a goal).Recipients:People react negatively to unjust allocations because it is in their best interest to doso. (Injustice as a strategy).People react negatively to unjust allocations because they care about injustice.(Injustice as a goal).People react positively to just allocations because they care about justice. (Justice asa goal).People react positively to just allocations because they are well compensated (Justiceas an instrumental strategic motivation).These statements do not exhaust all possible combinations of the content and natureof justice motivations for allocators and recipients. They are a summary of what justicetheories (and empirical studies) actually say about allocators and recipients.The theories tend to emphasize the self-interest motive for allocators and the justicemotive for recipients. Even allowing for Leventhat’ s (1980) argument that justice is just oneof the many motives underlying behaviour and that situational factors affect the salience ofparticular motives (e.g., justice or self-interest), it is an intriguing thought that in the same40exchange situation different motives may be salient depending on whether an individual isthe allocator or the recipient. The possibility that roles will determine motives (and actions)is not new: The most notable example is Zimbardo’s prison study at Stanford, where studentswere randomly assigned to “‘guards” or “inmates” for a week long experiment (Haney,Banks and Zimbardo, 1973) The extremity of their role-related behaviours forced Zimbardoand his colleagues to end the experiment. The current research is much less forceful andinvestigates whether considerably weaker role assignments nevertheless have strong effect.In the allocation situations studied here, the objective situation is the same for bothallocators and recipients. Although any feature of the situation which makes justice a salientissue for recipients should make the issue salient for allocators too, evidence suggests thatthis does not happen. Instead, the roles seem to elicit different motives. In this study, weplace people in the two roles of respondent and allocator sequentially (i.e., almost immediaterole reversal). These roles must be very powerful if they determine people’s motives in thiscontext.Theories that focus on recipients (e.g., equity theory and distributive justice theory)suggest that injustice is a motivator. Theories that focus on allocators (e.g., justicejudgement theory and impression management theories) suggest that justice (albeit aninstrumental form of justice) is the motivator.If the motive (goal or strategy) and content (justice or injustice) were universal, thenboth allocators and recipients should exhibit corresponding behaviours. For example, if themotive was strategic and the content was injustice, then allocators would behave unjustly ifit were in their best interest to do so, and recipients would react to unjust allocations if it41were in their best interest to do so. In reality, however, the motive and the content may notbe applicable to all people in all situations: Some people may be motivated by a desire to befair, and others may behave fairly only when it is in their best interest to do so. Similarlysome may be motivated by a desire for justice and others by a desire to avoid injustice. Thisreview provides the basis for the prediction of a systematic difference in the nature andcontent of the justice motive: Allocators seem to be interested in justice if it maximizes theiroutcomes; recipients appear to be centrally interested in avoiding injustice and this interestseems to be independent of instrumental concerns.Part of the problem that was outlined in the introduction, namely the role specificnature of justice motives and content, seems to be borne out in this review of relevantliterature. We turn now to an examination of the effects of power on the elicitation of thejustice or the self-interest motive.The theories that we have reviewed thus far are fairly easily classified as eitherreferring to an allocator or a recipient; these are usually well specified roles. They are notas easily classifiable as referring to either powerful or powerless actors, since a person’spower may depend on social judgements or frames of reference. Further, with the exceptionof retributive justice theory, they do not explicitly include power in their conceptualframework. If we assume that allocators are powerful, and recipients are not so powerful,then the same arguments that we made about justice for allocators and recipients can also bemade for actors with and without power. But this does not address the issue of the effectsof power on the content and motives of actors independent of their role of actors in anexchange. To understand the effects of power on motives and content, we turn to some42empirical and conceptual work on power that relates to justice motives.V. POWER.In this study, we use Emerson’s (1962) definition of power as dependence i.e., powercapabilities are based on the dependencies or inter-dependencies within a network of two ormore actors. Specifically, in a two actor system, the power of A is based on the dependenceof B on A and vice versa. There is an implicit assumption here that A (or B) can gain morepower only at the expense of B (or A). Bacharach and Lawler (1981) argued that this is notalways the case, and thus suggested that it may be useful to conceptualize social relations asvarying on two dimensions of power, total power (mutual dependence) and relative power(dependence difference). They suggest that this approach avoids the implicit assumption inEmerson’s work about the zero sum nature of power.Deutsch’s (1982) model of interdependence and psychological orientation is one ofthe few theoretical approaches that uses this definition of power to describe its effects onmotives. Deutsch suggests that a number of dimensions can be used to characterizeinterpersonal relationships. Among them are cooperation-competition, power distribution,task oriented versus socio-emotional, formal versus informal etc., These dimensionsdetermine the nature of social relationships and affect the psychological (i.e., cognitive,moral and motivational) orientations of individuals in social relationships. Cognitiveorientations refer to scripts, schemas and frames that people use to make sense of arelationship. Motivational orientation refers to situationally relevant motives and needdispositions. Moral orientation refers to mutual obligations, rights, and entitlement of the43people involved in the relationship.At the risk of great simplification, we look only at the effects of the power andcompetition-cooperation dimensions of Deutsch’s model. [It seems a valid simplificationbecause Deutsch (1982) himself discusses the effects of power in conjunction with thecompetition-cooperation dimension.] According to the model, the cognitive orientationpertaining to power concerns the relative power of the participants in a relationship tobenefit, harm, or persuade one another. In the competitive branch of the unequal powerschema the roles of ‘victor’ and ‘vanquished’ are highlighted; the equal power schema isoriented more to continuing struggle. When the two actors have congruent interests, the lesspowerful member is more likely to engage in ingratiation. The cooperative branch of theunequal power schema emphasizes responsibility for the high power person and respectfulcompliance for the lower power person. The equal power schema emphasiies mutualresponsibility and respect.The motivational orientations underlying power are based on self esteem and selfrespect. The powerful may have a need for dominance and the powerless a need fordeference or abasement depending on whether the context is cooperative or competitive.The moral orientation underlying an equal power relationship tends towardegalitarianism in the case of cooperative relationships and toward equality of opportunity,but unequal outcomes in the case of competitive relationships. In unequal power cooperativecontexts, the moral orientation suggests that the powerful will reward the less powerful andthe less powerful will show their appreciation. In the case of unequal power in a competitivecontext, the moral orientation of the strong and the weak support an exploitative relationship.44Other treatments of the effects of power on motives considers how people changewhen they gain power (e.g., Haroutunian, 1949 and Sampson, 1965). They suggest thatpower induces individuals to act inequitably and exploitativly toward the less powerful. Asthe old saying goes, power corrupts and absolute power corrupts absolutely. Kipnis (1972and 1976) describes the metamorphic effects of power: those who gain power begin todevalue the worth of the less powerful and view themselves as special and deserving ofbetter outcomes than the powerless.Other empirical studies that look at the role of power in exchange suggest thatpowerful actors are governed by the norm of social responsibility and come to feel a senseof obligation toward the less powerful: they tend to avoid exploiting the powerless (e.g.,Dorris, 1972).There is mixed evidence about the effect of power on motives in general, and justicemotives in particular making it is difficult to extend these findings. Further, not muchempirical work (with the exception of relative deprivation) has considered the motives of theless powerful actors. Deutsch’s (1982) model does suggest that power’s effects on motivesis moderated by actors’ definition of the context as either cooperative or competitive.We now turn to an unambiguously competitive context i.e., the experimental studyof bargaining games, and extend the ideas developed in this chapter on the effect of roles andpower to the motives of players who participate in these games.45CHAPTER 4.ULTTh’IATUM AND DICTATOR GAMES.Fairness or justice has been of central interest in many recent bargaining experiments,particularly in experimental economics. Though concerns for fairness were used to describeempirical results that deviated from early theoretical predictions (Guth et. al., 1982), social-psychological theories of justice have rarely entered into the discussion. (See Eckel, 1995and Guth, 1988 for two exceptions.)I. ULTIMATUM BARGAINING.As mentioned earlier, game theoretic predictions for ultimatum games have not beensupported empirically (e.g., Guth, Schmittberger and Schwarze, 1982; Guth and Tietz,1990). In particular, average offers typically approach 50-50 divisions of the payoff and,as the value of an offer drops, rejections become more frequent. As a result, several authorshave suggested that fairness drives the results of these experiments and, by extension, otherultimatum interactions. These explanations, however, were post hoc, rarely well defmed,and had not been tested experimentally until Pilutla and Murnighan (1995a), describedbelow. In particular, fairness explanations could be applied either to ultimatum offerers(who tend to offer much more than was predicted) or to ultimatum respondents (who rejectsome offers, again counter to prediction).i. Offerers. Recent research suggests fairness concerns cannot explain the repeated46observation of large ultimatum offers. Harrison and McCabe (1992) and Prasnikar and Roth(1992) concluded that relatively large offers seem to be motivated not by fairness concernsbut by fears that small offers will be rejected. Prasnikar and Roth (1992) also noted thatmaking small offers may be costly, since a rejection results in the offerer receiving a zeropayoff: All these findings were also the conclusions of Straub and Murnighan (1995).In most early ultimatum research, information about the money being divided wasknown to both offerers and respondents. Several recent studies (Croson, 1993; Kagel, et al,1993, and Straub and Murnighan, 1995) have also investigated partial information conditions,where respondents did not know how much was being divided. Straub and Murnighan(1995) used the different information conditions to operationally define fairness: Theysuggested that offerers who did not take advantage of information asymmetry and did notmake smaller offers when the respondent does not know the amount being divided were trulyfair, while those who took advantage of their information advantage by reducing the size oftheir offers when respondents did not know how much they were dividing were strategic.Guth and Van Damme (1994) use a similar definition. Their data showed that a largemajority of respondents used an information advantage strategically, reducing their offerswhen they knew that respondents did not know how much they were dividing.These experiments suggest that expectations of rejection and simple attempts tomaximize outcomes can explain the incidence of large ultimatum offers as well or better thanfairness norms. In a more pointed study to address this issue, Pillutla and Murnighan(1995a) gave offerers the opportunity to add fairness statements (e.g., “this is a fair offer”)to their offers; in other conditions offerers were informed that an independent third party47would evaluate their offers and add statements that the offer was either fair or unfair to thembefore presenting them to respondents. The different experimental conditions (i.e., partialand complete information, presence or absence of fairness statements, and presence orabsence of third party evaluation) were designed to provoke fairness concerns in the mindsof the offerers and in essence, manipulate fairness concerns directly. Pillutla and Murnighan(1995a) suggested that fair offerers would not take advantage of information asymmetry, notbe affected by the presence of third party evaluation, and would not make different offerswhen they could add fairness statements. If people made larger offers in the third partyevaluation or complete information conditions than in the non-evaluation or partialinformation conditions, then their ostensibly fair behaviour could be seen as an impressionmanagement strategy. The results indicated that offerers were predominantly concerned withimpression management: almost all of them made small offers when no one (except theythemselves) could evaluate the fairness of their offers. The most interesting result was that,when offerers were allowed to add fairness statements to their offers, they reduced the sizeof their offers, suggesting that they based their offers on strategies designed to increase self-gain rather than due to a genuine concern for fairness. All these results thus suggest thatalmost any view which suggests that fairness concerns drive ultimatum offers can beunderstood as instrumental (i.e., fear of rejection, impression management, etc.).ii. Rejection of Small offers. The fact that from 15 to 20% of the participants inultimatum experiments reject ultimatum offers (Ochs and Roth, 1989) is also counter to gametheoretic predictions and suggests that respondents are influenced by factors other than48maximizing gains. Several variations of fairness have been presented as reasons for thisbehaviour, including (1) the fact that insultingly low offers have negative utility (Ochs andRoth, 1989); (2) that people may require a payoff that exceeds some exogenously determinedminimum (Ochs and Roth, 1989); and (3) that rejections may be emotionally rather thancognitively or normatively based (e.g., due to wounded pride; Straub and Murnighan, 1995).The Straub and Murnighan (1995) experiments tested the first two hypotheses and found nosupport for either of them.Pillutla and Murnighan (1995a & b) were the first to test the wounded pridehypothesis. In their first study, they provided respondents with large and small offers(ostensibly originating from actual offerers, but actually determined by the experimenters)labelled as fair or unfair. Respondents were also led to believe that ‘This is fair’, or ‘Thisis unfair’ labels were either those of third parties or those of the offerers themselves. Partialand complete information conditions were also included. Pillutla and Mumighan (1995a)hypothesized that respondents would be influenced by third party labels especially when theycould not evaluate the fairness of the offers themselves (i.e., in the partial informationconditions). Further, they hypothesized that respondents would be particularly angry withoffers that were clearly unfair (i.e., small offers in complete information conditions), butwere labelled fair by offerers. This condition provided a test of the wounded pridehypothesis. Their results indicated that people were concerned about fairness: third partylabels did influence their accept or reject decisions. But large offers were acceptedirrespective of third party labels, indicating that the absolute size of offers may haveoverwhelmed their concerns for fairness. Pillutla and Murnighan (1995a) also found no49support for the wounded pride hypothesis: Instead, respondents seemed to ignore any fairnessclaims made by offerers.A second study (Pillutla and Mumighan, 1995b) was designed to create a more directtest of the hypothesis. Pillutla and Murnighan (1995b) hypothesized that respondents wouldbe most angry in situations where they could blame offerers for small offers, compared toconditions where they could not atthbute responsibility to the offerer. They askedparticipants to respond to small offers (ostensibly originating from students in other classes,but in fact determined by the experimenters) in partial and complete information conditions.They also provided respondents with different outside options (i.e., if they rejected the offerthey could get the amount specified as the outside option) that were greater than the offerin one condition, equal to the offer in the another, and less than the offer in the third. Theoffers and outside options were very small (5 to 10% of the amount being divided) and inthe range that earlier ultimatum respondents had judged to be unfair. Pillutla and Murnighan(1995b) informed one set of respondents that the offerer knew that they had outside options(and knew the value of the outside option: the common knowledge condition) and informedanother set that the offerer did not know that they had outside options (the not commonknowledge condition). The common knowledge-complete information condition washypothesized to produce the most anger, because the respondent could evaluate the fairnessof the offer and ascribe responsibility to the offerer (i.e., the offerer knew the value of theiroutside option and could be seen as taking advantage of this information). The experimentwas designed to study the causes of ultimatum rejection and hence created conditions wherethe possibility of rejections was great.50The results indicated that rejections were higher in the condition where respondentscould blame offerers for the unfair offers compared to conditions where subjects had reasonsto believe that, though the offerer made an unfair offer, they did so unintentionally. Thus,the results supported the wounded pride hypothesis. Since the perceptions of unfairness arenecessary precursors to actions based on wounded pride, the data indicate that feelings ofunfairness coupled with anger and wounded pride account for many of the rejectionsobserved in ultimatum experiments.These results (i.e., respondents reacting on account of wounded pride, anger etc.)along with Lamm’s (1986) suggestion that negative emotions are engendered most whenpeople are morally committed to justice (and not in conditions where they use justice forinstrumental purposes) suggest that respondents are genuinely concerned about fairness.The context of ultimatum bargaining provides a fertile ground for the study of theinstrumental means- injustice avoidance asymmetry. These previous findings suggest thatofferers use justice to maximize their outcomes, while respondents look for justice as an endin itself. By looking at people who fulfil both roles, one after the other, we can determinewhether a movement from one role to another would result in the transformation of motivesor the adoption of the motives that have been found to exist in that role in the past.II. DICTATOR GAMES.To address the issue of whether people make large offers because of strategic reasonsor because of fairness concerns, Forsythe, et a!, (1994) compared ultimatum and dictatoroffers. In dictator games offerers divide the endowment any way they want and the51respondents have no opportunity to reject offers. Forsythe et aL, (1994) hypothesised thatif the distribution of offers in ultimatum and dictator games was the same, then they couldinfer support for the ‘fairness hypothesis’.Their results show that while 21 to 36% make the smallest possible offer in dictatorgames no one does so in ultimatum games. Similarly, only about 21% of the offerers makeequal offers in dictator games compared to 65 to 75% in ultimatum games. They concludedthat a taste for fairness alone cannot explain large ultimatum offers.Forsythe et al., (1994) suggested that it may be useful to conceptualize the ultimatumgame as a game with incomplete information. They suggest that in such an incompleteinformation game, “some proposers are pure gamesmen, and others are concerned (tovarying degrees) with fairness and some respondents are pure gamesmen, whereas othershave ‘spite’ components in their utility functions and reject proposals that offer them toolittle”. The difficulty is not knowing which proposers are gamesmen and which respondentvalue spite. Thus, the probability that a respondent is spiteful makes non-trivial offersoptimal in ultimatum games. Forsythe et al., (1994) posit, however, that non trivial offersin dictator games are evidence of fairness.This conceptualization would lose some of its appeal if it can be found that dictatorofferers make larger offers for reasons other than fairness. In this case a satisfactoryexplanation for ultimatum games depends on a satisfactory account for dictator games(Forsythe et al., 1994).Other studies on dictator games provide conflicting evidence about the behaviour ofdictator offerers. Hoffman, McCabe, Shachat, and Smith (1994) reported that more52participants made equilibrium offers (i.e., zero offers) in completely anonymous conditionsthan in conditions which replicated the Forsythe et aL, (1994) study. This suggests thatlarge dictator offers also cannot be interpreted as evidence of fairness concerns. But, Bolton,Katok and Zwick (1993) reported that participant anonymity (from the experimenter) doesnot have a major effect on dictator game behaviour. Thus, it is not clear what themotivations of dictator offers are.Some observers (e.g., Roth, 1995) have questioned the comparison of ultimatum anddictator game behaviour because of the differing sequence of moves in the two games; i.e.,there is no need for a respondent to accept or reject offers in the dictator game. Bolton andZwick (1991) designed a game called the ‘impunity’ game, where the offerer may offer anypart of their endowment, the respondent can accept or reject, but the respondent’s decisionhas no effect on the offerer’s outcomes. The offerer gets whatever/he demands. This gamehas the same move sequence as the ultimatum game and the same incentive structure as thedictator game. Bolton and Zwick (1991) found that a large percentage of the offerers madeequilibrium offers. Although dictator and impunity offers are closer to game theoreticpredictions, there are still some non-trivial offers and it is not clear why.If the conclusion in the previous chapter is correct that the role (and situationalpower) in an exchange situation determines whether justice is a goal or is used as a strategy,then justice may not be the goal of dictatorship offerers either. Injustice avoidance,however, may still be the goal of the respondent. Unfortunately the ambiguous nature of thefindings about the effects of power does not allow us to make predictions about the motivesand behaviour of dictator offers relative to ultimatum offerers.53CHAPTER 5.APPLYING THE JUSTICE MODEL TO ULTIMATUM AND DICTATOR GAMESBased on our reading of the literature, we proposed a simple justice model in anallocation situation. Allocators use justice for strategic purposes. Recipients react toperceived injustice and use its avoidance as a goal. We also proposed that relative powerwithin the allocator or recipient roles would have an effect on the content of the justicemotive, though the exact relationship between power and motives is not as clear as therelationship between roles and motives.Past research suggests that this model may hold for offerers and respondents inultimatum (e.g. Pillutla and Murnighan, 1995a) and for offerers in dictator games (Forsythe,1995). Not much work has been done on respondents in dictator games. A simple extensionof the model suggests that offerers will be strategic and respondents will react negatively toperceived injustice in both dictatorship and ultimatum games.Ultimatum and dictator games provide a context where we can distinguish betweenthe goal and strategic aspects of justice by varying the degree of interdependence betweenofferers and respondents. These games also provide a forum for testing the differencebetween the motives of allocators and recipients. We infer and contrast motives by creatingsituations where the pattern of behaviour indicates the underlying motive. By juxtaposingpartial and complete information conditions and the experimental manipulation of salienceof fairness within ultimatum and dictator games, we create the necessary conditions toobserve patterns of behaviour indicating either a justice or a strategic motive. Also, studying54people as both offerers and respondents allows us to contrast their behaviours and theirmotives. Finally, as noted earlier, ultimatum and dictator offerers differ in power:comparing the two will provide information about the effects of power on justice motives.The reason we experimentally manipulate the salience of fairness is that someobservers (e.g., Lerner, 1981 with his model of justified self-interest) point out that takingadvantage of information asymmetry may be seen as fair (by participants). Similarly,participants may think it is fair to take advantage of their power and make smaller offers indictator games than in ultimatum games. Thus, concluding that people do not value justiceas a goal on the basis of different offers in various conditions of information andinterdependence, though valid, may require further corroboration.This corroboration can provided by the experimental manipulation of fairness.Starting with the idea that strategic behaviour can be inferred if we can demonstrate thatpeople use fairness to manage impressions, we designed an experiment where it is possibleto distinguish between behaviours intended to manage impressions and behaviours motivatedby other considerations.Greenberg (1990) suggests that people attempt to convince themselves and others thatthey are fair. The need for self-impression management provides the opportunity to createconditions where we can distinguish between behaviours motivated by justice and behavioursmotivated by other goals. People use normatively appropriate justice norms when they aremade more self-aware (e.g., when they are made to sit in front of a mirror in Greenberg,1983). Similarly, raising the salience of justice as an important issue in the decision makingprocess, prior to making a decision, should lead to behaviours reflecting a justice motive.55If justice were a preeminent guiding principle, as per Lerner (1981) (i.e., a goal in ourterminology), then increasing or decreasing the salience of justice concerns should make nodifference to the subsequent decision. In this experiment we manipulated the salience ofjustice by asking people to define what they thought was a fair offer prior to making anallocation or a response in one condition and after making an allocation or response in theother. Any difference in behaviour on account of the manipulation of salience of justiceindicates that justice was not the salient motive behind the behaviour. Asking people todefine a fair offer, not only manipulates the salience of fairness by raising the issue offairness in their cognitions, it also provides fairness estimates which can be used to predicttheir subsequent behaviours.Independent evidence, about the validity of this manipulation leads us to believe thatthis is an appropriate manipulation for our purposes. Wyer and Hartwick (1980) presentedconsiderable evidence that suggests that people do not carry out an exhaustive search of longterm memory for all relevant information prior to making a judgement. Rather, they basetheir judgement on a relatively small subset of available information. Also, Nisbett and Ross(1980) argue that people are often unsure of their beliefs and values and simply adopt themost cognitively available response in the immediate situation. Tetlock and Manstead (1985)extend this argument to suggest that providing people with information prior to the task athand influences their subsequent behaviour because it makes a particular (e.g., justiceconcerns) part of their memory salient. Thus, asking people to make fairness ratings wifiprime their fairness concerns, if they have not been primed already by the task. If themanipulation does not result in any change in behaviour, we may infer that fairness was56already part of the cognitions preceding the task. If it results in changed behaviour, on theother hand, we may infer that fairness concerns were not in the cognitions immediatelypreceding the task, and were primed by the manipulation.An important aspect of our model hypothesizes that few people are consistently fair.Instead, we argue that fairness is one of the many goals that motivate behaviour and thesalience of the justice motive is situation and role specific. By hypothesizing that some rolesevoke strategic behaviour, we imply that self-interest is more salient than fairness and thatfairness concerns, if raised at all, are typically used for strategic puiposes. Specifically, inthe case of ultimatum and dictator games we expect that the roles of offerer or respondentdetermine whether justice is used as a strategy or as a goal. To test whether the asymmetricmotives, i.e., justice as a strategy as an allocator and justice as a goal for recipients, arepresent in the same individual, participants take on the role of both offerers and respondentsin the experiment. The order in which they take the roles is systematically varied.Though we argue that the asymmetric motives are present in the same individual,varying the roles of people from respondents to offerers and from offerers to respondentsshould have differential effects on the motivations and consequently their behaviour. Mischel(1968) argued that, though people learn from different situations, how they perform dependson the stimulus in the current situation and the perceived consequences of their behaviours.We would expect that being a respondent first should make participants make larger offers,because they learn (from their own behaviour) that small offers are rejected (i.e., thestrategic motive). Also Lamm (1986) argues that people are more likely to be committedto justice if it is a goal rather than a strategy. Thus, being a respondent first, with its57hypothesized commitment to justice as a goal, should result in larger offers when peoplebecome offerers later if their concern for justice (i.e., justice as a goal) spills overOn the other hand, Lamm’s (1986) observation and the hypothesis that people aremore likely to look for justice when they are respondents suggests that the strong justiceconcerns that are evoked by the weaker respondent role may overpower any spill over oflearned behaviours (i.e., strategic behaviours) from the role of offerers. In other words,being a respondent before being an offerer should have more impact on behaviour than beingan offerer before being a respondent. Thus, offerers who have been respondents first willbe less strategic than offerers who have not been respondents, but respondents who havebeen offerers first will not be any less concerned with avoiding injustice.In sum, the experimental design includes ultimatum and dictator offers and responses,systematic variation of the ordering of offers, responses, and the activation of fairnessconcerns. We compare offer and response behaviour in ultimatum and dictator games, offerand response behaviour before and after the salience of fairness has been raised, offerbehaviour before and after people have been respondents, and response behaviour before andafter people have been offerers.Before proceeding to make any inferences about the goal or strategic nature ofjusticein ultimatum and dictator games, a caveat is in order. Greenberg (1990) has warned thatallocation decisions that look like they have been used to manage impressions of fairness mayhave been motivated by any number of other reasons, such as avoidance of conifict,minimization of cost incurred in experimental situations etc. For people to use justicestrategically (e.g., as an impression management technique) there has to be some recognition58that justice matters and that people should at least appear fair (if not be fair). If people donot recognize that justice is a desirable identity, then there is no reason to hypothesize thatthey use justice for strategic purposes. Thus, it is possible (if not probable) that fairnessconcerns do not matter at all to ultimatum and dictator bargainers, either as a goal or as astrategy. As a first step then we analyze the correlation between participants ratings of whatthey think are fair offers with actual offers and responses to see if they covary. Positivecorrelations suggest that fairness concerns play some role in ultimatum offers andbehaviours, although they would not tell us whether the use was strategic or that justice wasthe goal.Our conceptualization of strategic behaviour includes behaviours that reflectimpression management efforts and those that take advantage of power differences andinformation asymmetries. The definition is clear about what can be construed as strategicbehaviour on the part of offerers: taking advantage of information asymmetries and powerdifferences and making larger offers when the salience of fairness is raised. In theultimatum and dictator games, this means making larger complete than partial informationoffers, making larger ultimatum than dictator offers and making larger offers when thesalience of fairness is raised.Similar conclusions cannot be drawn about respondent behaviour. Different responsesin partial and complete information conditions do not indicate strategic behaviour. Instead,different reactions may be consistent with the fairness motive because participants canevaluate the fairness of offers when they are provided with information about relative payoffsbut they cannot when they do not have this information. Furthermore, participants may also59consider smaller offers to be fair in dictator than ultimatum games, leading to morerejections in ultimatum games. This possibility is tested by assessing people’s fairnessestimates in both ultimatum and dictator games. The only respondent behaviour that can beconstrued as indicative of strategic behaviour is if respondents reject more ‘unfair’ offerswhen the salience of fairness has been raised, i.e. after they have indicated what a fair offeris. Because we expect fairness to already be a salient motive in the respondents’ behaviour,we do not expect that this experimental manipulation will have an effect. No difference inthe response behaviour due to the fairness manipulation indicates no support for strategicbehaviour by respondents.Our logic combined with previous fmdings paint the following picture of the dynamicsof ultimatum and dictator games and their potential for revealing whether justice is a goalor a strategy. First, we assume that offerers are strategic. They take advantage ofinformation and power asymmetries. But offerers may have desires also to be known as fairpeople. Asking them to make fairness estimates and then asking them to make offers mayprompt them to be consistent. Thus, we predict that they will make offers that match orapproximate their fairness estimates. Fairness does not exist in their cognitions immediatelypreceding offer behaviour except as it affects their strategies (i.e., their calculations of whatrespondents might expect). Asking offerers to make fairness estimates after making offersagain raises the issue of consistency. Thus, we predict that they will make estimates thatmatch their offers. Differences will be observed in the size of offers and the fairnessestimates in the conditions where people make offers prior to fairness estimates or makeestimates prior to offers.60In contrast, we assume that respondents are looking for fairness. They will rejectmore offers when they have knowledge of relative outcomes. Fairness already exists in theircognitions, so asking them to make fairness ratings after responding to offers or makingfairness estimates prior to responding to offers should not result in differing fairnessestimates or response behaviour.Also, responding to offers before making them should reduce (but not completelyeliminate) the strategic behaviour of offerers. We expect that being offerers beforeresponding to offers will not reduce the concern to avoid injustice on the part of respondents.In addition to using sociological and psychological models of justice to explainultimatum bargaining behaviours, this study will add to previous research on ultimatums bytesting whether people who alternate from the role of offerers to the role of respondents (andvice versa) continue to support the emergence of asymmetric motivations within each of theseroles or are consistent from one role to another.61CHAPTER 6HYPOTHESES.In the previous chapter we developed a number of propositions regarding thebehaviour of participants in ultimatum and dictator games. In this section, we transformthese propositions into empirically testable hypotheses. In other words, we identify theresults that would obtain if allocators are interested in justice as an interpersonal strategy andrecipients are primarily interested in avoiding injustice.Offerers. Based on our definition of strategic behaviour, any difference in the sizeof offers between dictatorship and ultimatum games would indicate that people are usingjustice as an interpersonal strategy. This is exactly the result reported by Forsythe et al.Similarly any difference in the size of offers between complete and partial informationconditions indicates that people are using justice as an interpersonal strategy. This is theresult reported by Straub and Murnighan (1995).Neither of these studies addressed the argument that subjects may think it is fair totake advantage of their power or information advantage. The differential ordering of offersand fairness ratings allow us to determine whether offerers report that they are motivated bya desire to be fair and whether fairness concerns are consistent across conditions (betweenparticipants). If people make different offers (and fairness estimates) based on whether theywere asked to make the fairness estimates before or after their offer, we can say with somecertainty that they are using fairness as an impression management technique (i.e., it’s62instrumental). The manipulation of the order of the tasks does not affect the structure ofinterdependence and should not alter the offerers’ strategic considerations, so any effort toincrease offers to approach fairness estimates also indicates an impression managementstrategy.Respondents. If respondents are motivated by a desire to avoid injustice then weshould not see any difference in their responses in the ultimatum and dictatorship games.More importantly we should not see any difference in their responses (and fairness estimates)whether they rate what is fair either before or after responding. If the order of their fairnessestimates has no effect, it suggests that their fairness concerns are true and not based on animpression management motive.The specific hypotheses include:If offers are constructed to appear fafr for instrumental purposes, then1) Offers made after the fairness ratings will be larger than those made before. (Fromimpression management theory but against justice motive theory).2) Offers will be significantly larger in ultimatum games than in dictatorship games,(Justice as an interpersonal strategy)3) Offers will be larger in complete information than in the partial informationcondition.4) Offers rated as fair in dictatorship games will be smaller than those in ultimatumgames. (Against equity theory).63If justice is the goal for offerers, then2a) Offers will be the same in ultimatum games and in dictatorship games.3a) Offers will be the same in complete and partial information conditions.If justice is neither a goal nor an interpersonal strategy for offerers, thenib) Offers made after the fairness ratings will not be different from those made before(Against impression management theory), and5) Ratings of fairness and offers will not be correlated.If the goal of respondents is to avoid injustice, then the following should hold true.6) Fairness ratings before responding to offers will equal fairness ratings afterresponding to offers (Against Impression Management Theory).7) Fairness ratings will not differ in ultimatum and dictatorship games when the sUbjectis a respondent first.8) Respondents’ acceptances will be predicted by their fairness estimates.9) Acceptance rates will not differ when people give fairness ratings before they respondto an offer versus after responding to offers.If respondents are reacting to injustice for strategic reasons (i.e., it is normativelyexpected of them) then9 a) They will reject more small offers in the condition where they respond after havingrated the fairness of offers than in the condition where they have responded to offers64first. (Impression management theory).If respondents are not concerned about justice either as a strategy or as a goalthen8 b) Respondents’ acceptances will not correspond to their fairness ratings.Finally, if the idea that the injustice of the current situation overwhelms the strategicintent of people or the strategic intent in the current situation is dampened by injustice of aprevious situation is true then10) Offerers will make larger offers in the conditions where they have been respondentsfirst.11) Responses of participants who have been offerers first will not differ from those ofrespondents who have not been offerers first.65CHAPTER 7.PROCEDURES.This study was conducted as an in-class exercise. Participants were 225undergraduate students enrolled in six sections of an introductory organizational behaviourcourse. The task was presented as a negotiation exercise where participants had a chanceto earn real money.All participants made offers, responded to offers and made fairness ratings. Theordering of these three tasks was varied to get six experimental groups in ultimatum gamesand six experimental groups in dictator games. (See tables 1 and 2). We will describe theprocedures for one group that played the ultimatum game. The procedures were similaz inother ultimatum conditions except for the ordering of the three tasks. In the six dictatorconditions, dictator game instructions replaced ultimatum game instructions; everything elseremained the same.In one of the ultimatum conditions, participants were asked to make eight ultimatumoffers to people in another class, two for each of four different amounts; $10, $20, $30 and$400. (Note: the inclusion of $400 is rare in previous ultimatum research. It was includedhere to determine whether very large stakes made a difference to people’s behaviour,particularly, offerers’.) Offerers were told that for four of the offers, respondents would notbe told how much they were dividing (the partial information condition); for the other fouroffers respondents would be told how much they were dividing (the complete informationcondition). Partial information offers always preceded complete information: the four66amounts were randomly arranged in each of the two information conditions. After peoplehad made the offers they were asked to specify what they thought were fair offers in thecomplete information conditions for each of these four amounts. The fairness questions wereof a general nature: They did not ask participants to take on the role of either a respondentor an offerer. For example, the question posed for $10 was: When $10 is the amount thatanother person is dividing, what is the lowest possible amount for an offer that you wouldstill regard as fair. We did not want to increase the complexity of the exercise by askingabout fairness in partial information conditions: By doing so, the availability of informationmight lead them to view the exercise from the point of view of the offerer, because in partialinformation conditions only the offerer would know the amount being divided.After making offers and fairness ratings, participants took the role of respondents andresponded to a set of ultimatum offers ostensibly made by students from another class. Toobtain people’s reactions to a wide range of offer sizes, we gave respondents two small andtwo large offers (predetermined by us, based on past research) in the partial informationcondition, and two large and two small offers in the complete information condition for atotal of eight offers. Partial information offers always preceded complete information offers.The small and large offers were randomly ordered in each information condition. Theamount being divided was always $10. Based on past research, the following set of offerswas constructed: 40, 50, 55, and 60 cents, and $2.35, $2.50, $2.55, and $2.75. Offersbetween 40 and 60 cents were considered small offers and those between $2.35 and $2.75were considered large offers. The offers presented to respondents were randomly selectedfrom this set subject to the following constraints: 1) There were to be two small and two67large offers in each information condition and 2) No person could receive the same offertwice. Thus, though everyone responded to all eight offers, a specific offer was notnecessarily in the same information condition or in the same position within the informationcondition for everyone.After the participants responded to all the offers they were asked the followingquestion: Under the conditions in the previous section would you accept any amount? If not,what is the lowest amount that you would accept? This was the main dependent variable forrespondents.Participants were then requested to fill out a form that solicited demographic datasuch as age, gender, ethnicity, work experience if any, average weekly wages and theprofession of their parents. Examples of the experimental materials used for this particularcondition in the experiment are included in Appendix i.The offer-rate-respond condition was one of the six conditions in the design. Forother conditions the sequencing of offer, rate, and respond were systematically varied,yielding six different orderings (see table 1). The design for dictator games was similar withdictator offers replacing ultimatum offers, responses to dictator offers replacing responsesto ultimatum offers, and ratings of dictator offers replacing ratings of ultimatum offers (seetable 2). The study included twelve conditions in all.We ran the experiment two conditions at a time, with conditions having similar firsttasks were run together. For example, the offer-rate-respond and the offer-respond-rateconditions were run together. Similarly the rate-offer-respond and the rate-respond-offerconditions were run together. Ultimatum and dictator sessions were run separately. There68were 35 to 40 participants in each experimental session. In each experimental sessionparticipants were told that five people would be chosen by lottery to be paid. One of theiroffers or responses would be chosen by lottery to determine their actual payoffs.At the end of each experimental session, five people were chosen by lottery forpayoffs. Once the five winners were selected, another lottery was conducted to determinewhich of their actual decisions (offer or responses) would determine their payoff. Forexample, if the decision chosen for payoff was the offer when the amount being divided was$10 in partial information, and the participant made an offer of $2, then we did thefollowing: We took the actual offer ($2) and presented it to a person from another class,explained the rules of the game (we also told them that they would not know the amountbeing divided, because it was partial information) and asked them to either accept or rejectthe offer. If they accepted the offer we gave them $2 and later gave the offerer $8. If theyrejected the offer, then we did not pay them and later informed the offerer that their offerhad been rejected; they would not get anything. If the decision chosen for payoff was aresponse to an offer of $ 2.45 and the participant had accepted the offer, then we paid themthe $2.45 immediately. In two out of the three ultimatum sessions, offers with $400 as theamount being divided were selected; In one of the dictator sessions two offers with $400 asthe amount being divided were selected. The two ultimatum offers, both in the completeinformation condition, were both for $200. The two dictator offers were $100 and $1.After the exercise the lotteries were conducted, the participants were thoroughlydebriefed, and the winners were informed about where to collect their payments.69Design. Task Sequence (6) and the type of game (2) were between subject factors.Information (2) and Amounts (4) were within subject factors. The order of presentation ofamounts was randomized. Partial information offers and responses always precededcomplete information offers and responses. Please see tables 1 and 2.This design made it possible to distinguish between different types of strategic offerbehaviour. By comparing ultimatum and dictator offers we could demonstrate the effects ofthe desire to avoid rejections on offer sizes. By comparing ultimatum offers in partial andcomplete information conditions we could empirically demonstrate the effects of a desire toavoid rejections combined with a desire to appear fair on offer behaviour. By comparingdictator offers in the partial and complete information conditions, we could see the effectsof a desire to appear fair on offer behaviour. Similarly, the design made it possible to seethe effects of the desire for punishment and the desire for fairness. By comparing therejections in ultimatum games with those in dictator games we could see the effects of thedesire to inffict punishment and by comparing the rejections in the partial with the completeinformation conditions, we could demonstrate the effects of social comparison processes onresponse behaviour. Another advantage with this design is that we allowed participants todefine what constitutes fairness, and then saw whether their definition of fairness predictedtheir behaviour, as well as whether their behaviours predicted fairness estimates.Analyses. There are three sets of dependent measures in this experiment: offers,responses, and ratings. Tests of the hypotheses used multivariate comparison procedures forthe means of offers and ratings and frequencies of acceptances for responses for the different70experimental conditions.Several of the hypotheses predicted no difference between experimental conditions.To conduct a conservative test and maximize the possibility of detecting differences we setalpha levels at .25 for these hypotheses. For the hypotheses that predicted differencesbetween experimental conditions, we used conventional alpha levels (.05, unless otherwisenoted).71CHAPTER 8.RESULTS AND DISCUSSION.Tables 3 through 8 report the means of offers, fairness ratings, and acceptancefrequencies in the ultimatum and dictatorship games. Before reporting the results of thestatistical analyses, discussion of some of the striking features of these data is in order. Wereport the results for ultimatum and dictator games separately; since the pattern of results forultimatum and dictator games were similar, we discuss them in combination later.The means of the ultimatum offers presented in Table 3 clearly show that participantsmade larger offers in complete than in partial information conditions: On average theyoffered 28.1 % of the amount being divided in partial information and 40.6% in completeinformation. Offer sizes increased with the amounts being divided both in complete andpartial information conditions, though offer size as a percentage of the amount being divideddropped with increasing amounts. Over all complete information offers, participants offered44.3% when they were dividing $10, and 37.6% when they were dividing $400. Averageoffers made after fairness ratings were larger, at 36.9% than offers made prior to fairnessratings at 31.0% (see the first and third rows in Table 3.). Offerers who had acted as arespondent prior to being an offerer made considerably smaller offers than offerers who hadnot previously been a respondent. On average people offered 25.3% of the amount beingdivided after they had responded to ultimatum offers compared to 31.0% when they madeoffers first. This drop was mitigated to some extent when people made fairness ratings afterresponding but prior to making offers; then, the overall average was 26.3% (see row 4).72Table 4 shows the frequencies (and percentages) of acceptances of small (40 to 60cents) and large ultimatum offers (average of $2.50) in the different conditions. Many moreof the large offers were accepted, 8 1.2% compared to 29.8% of the small offers. Similarly,more partial (60.7%) than complete information (50.8%) offers were accepted. Participantswho had made fairness ratings, made offers, and finally responded to offers were, onaverage, the most frequent rejectors, in each of the four conditions. This was also thecondition that led to the largest offers (see Table 3). In all other conditions the acceptancerates of large offers varied little, ranging from 81.3% to 92.2%.Table 5 shows the means of the fairness ratings in the ultimatum games. They werefairly stable across the experimental conditions, ranging from 30.1 % to 42.6% of the amountbeing divided; the overall mean was 35.5%. The average fairness perceptions were stable,in percentage terms, for $10, $20, and $30; for $400, people indicated that a somewhatlower percentage was fair.Table 6 shows the means of the dictator offers. The pattern and size of the offers aresimilar to those of ultimatum offers. These offers are considerably larger than the dictatoroffers reported by Forsythe et al. (1994). Participants continued to make smaller offers inpartial (26.6%) than in complete information conditions (35.9%). Though the offersincreased with increasing amounts, their size as a percentage of the amount being divideddeclined: Offers averaged 38.8% when $10 was divided and 3 1.6% when $400 was divided.Similar to ultimatums, offerers in dictator games made smaller offers (21.7%) after theyresponded to offers, compared to the conditions where they made offers first (30.9%).Table 7 reports the frequencies of acceptances of dictator offers. As with ultimatums,73more partial information offers (61.3%) were accepted compared to complete informationoffers (55.15%). Similarly more large (79.9%) than small offers (36.52%) were accepted.Acceptances were consistently lower when people responded to offers after making fairnessratings and after making offers.Table 8 reports the means of the fairness ratings in the dictator games. They arestable across the different experimental conditions and across the varying amounts. Theyare remarkably high, ranging from 30.8.% to 39.1.% and almost as high as those in theultimatum games.Overall, ultimatum offers were larger than dictator offers and more ultimatum offerswere rejected than dictator offers. But the pattern of offers, rejections and ratings weresimilar across the two games. Complete information led to larger offers and more rejections.Raising the salience of fairness, i.e., asking people to make fairness ratings, resulted inlarger offers. People made considerably smaller offers if they had acted as respondentsbefore acting as offerers.We report tests of the hypotheses on offers first, on ratings second, on responses thirdand on those that pertain to their interrelationships last.I. HYPOTHESES TESTS.We tested six groups of hypotheses; those that support the assumption that offers areconstructed to appear fair for instrumental purposes, those that follow from the assumptionthat justice is a goal for offerers, those that support the assumption that the goal ofrespondents is to avoid injustice, those that follow from the assumption that respondents react74to injustice for strategic reasons, and those that follow from the assumption that justice isneither a goal for nor a strategy of offerers or respondents. We report the tests for eachgroup of hypotheses separately.i. Tests for the assumption that offers are constructed to appear fair forinstrumental purposes.We first conducted an overall multivariate analysis of variance test for ultimatum and dictatoroffers using the amount being divided as a covariate and information as a within subjectvariable2. Between subject variables included sequence of the three tasks, and the game theyplayed (ultimatum or dictator). The MANOVA yielded significant main effects forinformation, sequence, and game. Larger offers were made in complete information ascompared to partial information conditions (F (1, 863) = 127.42, p <.01) and ultimatumoffers were larger than dictator offers ((F (1, 863) = 3.92, p <.05). These fmdings supporthypotheses 2 and 3. The game by sequence interaction and the game by informationinteractions were significant, suggesting that sequence and information had different effectsin the two types of games. We thus performed MANOVAS for both games separately; theresults are shown in Tables 9 and 10. In both games information and sequence weresignificant and their interaction was not.Hypothesis 1 states that offers made after fairness ratings will be larger than thosemade before; hypothesis 10 states that offerers will make larger offers in the conditionswhere they have been respondents first. To test these hypotheses we tested the followingcontrasts for both ultimatum and dictator games: 1) A comparison between offers that were75made first and offers made after the fairness rating; 2) A comparison between offers madefirst and offers made after responding to offers; 3) A comparison between offers made afterresponding to offers and offers made after responding to and ‘rating offers; and 4) Acomparison between offers made after rating offers and offers made after rating andresponding to offers.3In ultimatum games contrast 1 tested hypothesis 1; contrast 2 tested hypothesis 10;both were both significant [F (1, 211) = 3.52, p <.06 for contrast 1 and F (1,222)= 4.18,p < .04 for contrast 2]. The significant result for contrast 2 was in the opposite directionto that suggested by hypothesis 10. Offerers reduced offers after they responded to offerscompared to the sequences where they made offers first. We expected them to increase theiroffers in this condition.In dictator games contrast 1 was not significant, failing to support hypothesis 1.Contrast 2 was significant but, as in the ultimatum games, it was exactly opposite to thedirection predicted.Hypothesis 2 was supported [F (1, 863) = 3.92, p < .05]: ultimatum offers werelarger than dictator offers. Hypothesis 3 was supported [F (1, 864) = 127.42, p < .01];complete information offers were larger than partial information offers.An analysis of variance for fairness ratings using game and sequence as betweensubject variables showed no significant effects for game or for sequence. An ANOVA ona subset of the sample of sequences where offers were made before ratings or responses ledto a marginal difference between the fair ratings in ultimatum and dictator games [F (1, 121)= 2.82: p < .1]. These results offer almost no support for hypothesis 4 which predicted76that fairness ratings would be larger in ultimatum games than those in dictator games. Theyalso attest to the stability of feelings of fairness in a variety of contexts.Of the four hypotheses in this group, hypotheses 2 and 3 were strongly supported,hypothesis 1 which predicted an increase in offer size following fairness rating was supportedonly for ultimatum games and hypothesis 4 was not supported at all. We may conclude thatultimatum offerers, and to a lesser degree dictator offerers, used fairness as a strategicdevice.ii. Tests for the assumption that justice is a goal for offerers.As reported earlier, ultimatum offers were larger than dictator offers and completeinformation offers were larger than partial information offers. Thus, hypotheses 2a and 3awere clearly not supported. Clearly, justice is not a goal for offerers.ffl. Tests for the assumption that justice is neither a goal nor a strategy forofferers.Complete information offers and fairness ratings were highly correlated (r=.859, p< .01 for ultimatum games and r= .802, p < .01 for dictator games) indicating no supportfor hypothesis 5, which stated that offers and fairness ratings would not be correlated. Wecannot conclude that fairness was neither a goal nor a strategy for offerers.iv. Tests for the assumption that the goal of respondents is to avoid injustice.One of the contrasts in the ANOVA of the fairness ratings was the difference between77fairness ratings prior to responding and after responding to offers. Hypothesis 6 posits nodifference in the fairness ratings between the two conditions; it was supported (t = -0.35,p < 0.73).Hypothesis 7 suggests that fairness ratings will not differ in ultimatum and dictatorgames when participants are respondents first; it was tested by comparing the ultimatum anddictator ratings where respondents gave their fairness ratings after they had responded tooffers. Although the results are weak [F (1, 453) = 1.93 p < = 0.17] they do notsupport hypothesis 7.To test hypothesis 8, that respondents’ acceptance will be predicted by their fairnessestimates, we performed a factor analysis for the fairness ratings of different amounts andused the factor scores to predict acceptance of offers in the different conditions. Theprincipal components analysis extracted one factor in ultimatum games and one in dictatorgames. In ultimatum games the ratings for all amounts were highly correlated with thefactor (the lowest r = .84); it explained 82% of the variance. Similarly for dictator gamesthe ratings for all the amounts were highly correlated with the factor (the lowest r = .7 1);it explained 81.4% of the variance. Table 12 shows the results of the logistic regressionwhich used the factor scores as predictors and the response as the dependent variable.4 Theresults were consistent for both large offers, i.e., if the beta value was significant for theoffer randomly numbered one, then it was also significant for the one randomly numberedtwo. The results show that the beta coefficients were significant for the rating factor forlarge offers in the complete information condition. Results were not consistent for the smalloffers: one beta was significant and three were not. This partially supports hypothesis 8,78which makes a prediction only in complete information because respondents cannot makefairness judgements in partial information.We performed a CATMOD ANOVA using the sequence of tasks, amount offered,information and the type of game as independent variables and the response as the dependentvariable5. The results are shown in Table 11. Significantly more large than small offerswere accepted (X2 (1) = 788.3, p <.01) and significantly fewer complete information thanpartial information offers were accepted (X2 (1) = 40.8, p <.01). Rejection of offers wasnot significantly different in the two games (X2 (1) = .04, ns), though the pattern ofrejections appeared different. The sequence main effect was also not significant (X2 (5) =6.3, ns).Hypothesis 9 states that there will be no difference between respondents’ behavioursfor those who give fairness ratings and then responded to offers and participants whoresponded to offers first. A logistic regression supported this prediction, showing nosignificant difference between the reactions of participants who responded to offers first andthe reactions of participants who responded after making fairness ratings (b = -0.07 p<.33).Hypothesis 11 was also supported: A logistic regression analysis revealed that theacceptances of offers by respondents before they took the role of offerer were notsignificantly different from the acceptances of those who had been offerers (b = 0.046 p <0.53).Of the four hypotheses in this group hypotheses 6 and 9 were strongly supported.Hypotheses 8 which stated that respondent’s acceptances will be predicted by their fairness79ratings was true only for large offers, i.e., fairness ratings only predicted responses to largeoffers. Hypotheses 7 that stated that fairness ratings after responses will not differ inultimatum and dictator games was not supported. On balance, we may infer support for theassumption that the goal of respondents is injustice avoidance.v. Tests for the assumption that respondents are reacting to injustice for strategicreasons.Respondents’ rejections in the conditions when they responded to offers after makingfairness ratings did not differ from the rejections in the conditions when they responded tooffers first. Thus, hypotheses 9a was not supported and we may infer that respondents werenot reacting to justice for strategic reasons (or more accurately because it is normativelyexpected of them).vi. Tests for the assumption that respondents are not concerned about justiceeither as a goal or as a strategy.As pointed our earlier, respondents’ acceptances of large offers was predicted byfairness ratings. This does not support the notion that respondents are not concerned aboutjustice.Overall the results provide moderate support for the role specific model of justice:Offerers seem to be interested in justice for strategic purposes, and respondents areconcerned with avoiding injustice. Most of the hypotheses motivated by competing justice80theories were not supported. Some hypotheses based on our model were not supported andwe examine them in the next section.II. A NOTE ON UNSUPPORTED HYPOTHESES.Of the hypotheses that did not find support, hypotheses 4 and 7 are derived directlyfrom the proposed model of justice. Both refer to the difference between fairness ratings inultimatum and dictator games; hypothesis 4 posits a difference in the two ratings forparticipants who make ratings following offers and hypothesis 7 posits no difference in thetwo ratings for participants who make ratings following their response to offers. Weinferred no support for both hypotheses because the test was significant at an alpha level of10 for hypothesis 4 (more than the conventional .05 level) and at an alpha level of .17 forhypothesis 7 (less than the .25 level that we set for hypotheses of no difference). Thoughwe did not fmd support for the hypothesis of difference and for the hypothesis of nodifference, the data suggests that there was stability in fairness ratings across differentexperimental conditions. We will discuss the implications of this point in some detail in thenext section.Hypotheses 1 and 8 which were partially supported also follow directly from ourmodel of justice. Hypothesis 1 which refers to the effect of the fairness manipulation onoffer size was supported only for ultimatum games. The lack of support for dictator gamessuggests that we may have to modify our justice model and we discuss the modification insome detail in the next chapter. Hypothesis 8 which predicted a relationship betweenfairness ratings and response behaviour was significant only for larger offers (i.e., those81around $2.50) indicating that the small offers that participants had to respond to may havebeen too small. This suggests that a new study with larger offers may be necessary to geta clearer understanding of response behaviour. We outline such a study in chapterl0.The other hypotheses that did not find support, i.e., hypotheses 2a, 3a, 5, 8b and 9awere based on other theoretical approaches and were in direct opposition to the predictionsof our modelifi. DISCUSSION.The self-interest (or strategic) explanations for fair behaviours are based on the ideathat actors work to enhance their own benefits (either in the short or long run). Forexample, people do not violate norms when they believe that they will be sanctioned but doviolate norms when they believe that they will not, or if people behave more fairly withothers on whom their outcomes are dependent compared with those on whom their outcomesare not dependent, or if people express concerns for fairness only to appear fair to thirdparties or exchange partners (i.e., they behave unfairly in the absence of public scrutiny)then it is assumed that their motive is one of self-interest and that they are using fairnessstrategically. Stable behaviour across these conditions, in contrast, may reflect that theunderlying motive is not self-interest. This experiment was designed to provide a contextwhere motives can be distinguished from strategies; it is based on the assumption thatmotives and strategies can be inferred from patterns of behaviour. The hypotheses reflectthe pattern of behaviour we may expect if people are guided by either the strategic or• thejustice motive.82Most of the hypotheses concerning the strategic motives of offerers were supported.Offerers took advantage of information asymmetry and increased their offers when thesalience of fairness was increased, that is, when they were asked to make fairness ratings.Ultimatum offers were larger than dictator offers even though participants considered similaroffers to be fair in both ultimatum and dictator games. That ultimatum offers were largerthan dictator offers also suggests that ultimatum offerers were concerned about potentialrejections. This conclusion is strengthened by the observation that people made larger offersin complete information rather than in partial information conditions. This fits the findingsof previous research (e.g., Straub and Murnighan, 1995).Most people reduced their offers after they had responded to several previous offers.According to our model, the fairness motive is dominant for people who are respondents inan allocation situation. We expected that once this motive was evoked by asking people tobe respondents, it would spill over and influence their behaviours when they were asked tomake offers. This rationale led to a hypothesis that was the same as that for offerers whomade offers after malcing fairness ratings. This did not happen, however; instead, peoplemade lower offers after they had acted as a respondent. Though this result still supports thehypothesis that those who take on the role of offerers are strategic, it does not provideevidence that respondents’ concerns for fairness spill over to make them more likely to makemore equal offers. Though the offers made by participants who were respondents first weresmaller than in all other conditions, they were still not as small as the offers that theyreceived as respondents: On average they offered $3.35 when dividing $10 compared to theaverage predetermined (large) offer of $2.50. This behaviour, lowering offers after having83been respondents, may have been caused, at least in part, by the low offers that theyreceived. The large offers they received were smaller than their estimates of fair offers andsmaller than their own offers would have been had they not responded to offers. The resultsmay have been different if the predetermined offers were closer to 50% of the amount beingdivided.These unexpectedly lowered offers were the most robust fmding in this experimentand warrant further explanation. One possible explanation is that people learn through theirexperience as a respondent that even low offers have a chance of acceptance (especially ifthey themselves accepted such small offers). Another possibility is that people were angeredby low offers and made low offers when they had a chance to do so, as some kind of ageneral reciprocity norm.Though we cannot distinguish between these two explanations with certainty, wesearched for systematic patterns in the data that would favour one explanation over the other.If people who rejected offers made smaller offers than those who accepted, then we mightinfer that anger was the driving force behind small offers. In contrast, if lower offers weremade by people who had accepted offers as respondents, then we might infer support for thelearning explanation. Since participants responded to four offers, we categorized them basedon whether they rejected none, one ,two, three or four offers, and compared the mean offersin each of these five groups of offerers. No one rejected only one small offer; if theyrejected one small offer, they also rejected the other. Also, no one rejected large offers andaccepted small offers. Thus, no one rejected only one offer. Some respondents did rejecttwo small and one large offer. As a result there were four categories i.e., no rejections,84two, three and four rejections. A MANOVA using these categories as a between subjectindependent variable and information as a within subject variable and the eight offers (4amounts X 2 information conditions) as independent variable revealed no significantdifferences for the categorization (F = 1.13 p <.36). An examination of the meanssuggests that the lowest offers were made by people who rejected one large offer ($2.88,$5.75, $10.25 and $100 when dividing $10, $20, $30 and $400 respectively in the completeinformation condition), the next lowest by people who rejected only the small offers ($4.25,$7.50, $11.50 and $147.50 when dividing $10, $20, $30 and $400 respectively in thecomplete information condition), and the largest by those who rejected both large offers($4.75, $8.75, $11.50 and $125.50 when dividing $10, $20, $30 and $400 respectively inthe complete information condition). Note that the people who rejected one or both largeoffers also rejected the small offers. Thus, we cannot conclude whether lower offers suggestanger or learning.People did not lower their offers after being respondents as much in the dictatorgame. This may be explained by assuming that dictator respondents were not as angered bysmall offers as ultimatum respondents. Dictator respondents may have been resigned to theirfate because the power imbalance was so great, and therefore may not have regarded a smalloffer as a reason to be angry. While this suggests that ultimatum respondents might beangered by small offers but dictator respondents were not, ultimatum offerers also had agreater incentive to learn that small offers were effective while dictator offerers had no suchincentive. Thus, dictator offerers not reducing their offers after being respondents as muchas ultimatum offerers is also consistent with the notion that dictator offerers did not learn85strategic behaviour.Another unexpected fmding is that ultimatum offerers were affected by themanipulation of fairness salience but dictator offerers were not. We had expected offerersto increase the size of their offers when the salience of fairness was increased. When theymade offers after fairness ratings, we expected offers to be larger that when they made offerswithout being asked about fairness. This was true for ultimatum but not for dictator offers.Also, in almost half of the cases (46.5%), ultimatum offers exceeded offerers’ fairnessratings. This implies that the offerers made offers that they felt were more than fair. Fordictator games, in contrast, offers exceeded fairness ratings in only 29.9% of the cases. Thismay be because dictator offerers did not feel the pressure to justify their offers in terms offairness. The lack of an effect for the manipulation of fairness salience suggests that eitherdictator offerers were not concerned about fairness or that a concern for fairness was alreadypart of their decision- making process and they therefore needed no priming to make fairoffers. (We will return to this issue in the next chapter.)There was remarkable stability in the fairness ratings. No differences weresignificant across any of the conditions. We had expected offerers to attempt to make theirfairness ratings congruent with their offers and thus make lower fairness ratings after makingan offer. This did not happen. The nature of the question that elicited the fairness ratingmay have contributed to this result. Participants did not take on the role of offerer orrespondent when they made fairness ratings; they simply were asked what they thought wasfair in the given circumstances. The often apparent ego centric biases (Lowenstein andThompson, 1992) were not apparent here. We expected that the desire to appear fair would86force participants who had made lower offers to suggest that these lower offers were fair.The idealized nature of the question may have led to more objective fairness assessments.We had expected differences in the ratings when they were made prior to. or after makingoffers: This would have suggested that people claim that the offer that they have alreadymade (which would presumably have been less than ‘a fair offer’) is a fair offer, thuslowering their fairness ratings. Though ratings were related to and affected offerers (offersincreased after ratings in ultimatum games), offer behaviour had no effect on rating.Most of the hypotheses concerning the injustice avoidance aspects of responses weresupported. The presence of fairness salience did not lead to more rejections of small offers,suggesting that fairness was already salient for respondents. Almost the same proportion ofsmall offers were rejected in dictator and ultimatum games. While this could mean that theoffers had no meaningful value for the participants in this sample, the differential responserate in partial and complete information conditions suggests that some elements of fairness(or social comparison) entered the decision making process. Respondents’ fairness ratingswere predictors of acceptance rates only for large offers. Small offers may have been toosmall; they were frequently rejected. There was greater variability in the acceptance ratesof larger offers, and here fairness concerns may have pushed people to reject operationallylarge (but still relatively small) offers.We suggested that if fairness ratings did not correlate with both responses and offersthen we could conclude that fairness had no role to play in the decision making process ofparticipants in these games. Further, we suggested that if fairness was the goal of offerers,then they would make similar dictator and ultimatum offers, similar partial and complete87information offers and similar offers whether fairness was made salient or not. We alsosuggested that if respondents rejected more offers after they had made fairness ratings thenit implies that fairness was not part of their decision making schema and needs to beactivated before it has an effect. None of these results transpired, suggesting that fairnesswas an issue in ultimatum and dictator decisions and that it was not a goal for offerers or astrategic device for respondents. In essence, the observed pattern of results supports ourmodel that offerers are strategic and respondents look for fairness.Overall, our results suggest that fairness is an important component of the decisionmaking apparatus of respondents and dictator offerers. Fairness becomes an important partof ultimatum offerers’ decision sets when its salience is raised. Impression management canexplain the behaviour of both ultimatum and dictator offerers though more effectively in thecase of ultimatum offerers. Concerns for fairness can explain the behaviour of theserespondents.Our motivation for conducting this study was to empirically demonstrate that asituational model ofjustice motives is a better predictor of behaviour than either a model thatassumes that justice is an interpersonal strategy or a model that assumes that justice is a goal.Based on a review of the literature we suggested that theories which emphasize eitherfairness as a strategic device or fairness as a fundamental human motive may both becorrect, depending on the situation. A model which incorporated the specific conditionswhich determine the salience of either motive would be more comprehensive and a betterpredictor of behaviour.We noted that the roles that people take in an allocation situation seem to determine88the primacy of either the self-interest or the justice motive. Specifically, we found thatallocators were motivated by a desire to maximize their outcomes, and hence used strategiesthat conveyed the illusion that they were behaving fairly. Recipients looked for fairdistributions, and in its absence, reacted negatively. We call this the Role Model .of JusticeMotives. Our results demonstrate that it is valid in the specific case of ultimatum anddictator games.Power was another situational variable that we had identified as having some bearingon justice motives. We found that powerful allocators (dictators) made smaller offers thanless powerful allocators (ultimatum offerers) though they were less strategic with informationand were less affected by the fairness salience manipulation. Their power did not, however,affect the behaviour of respondents. Thus, power seems to interact with roles in its effectson behaviour, at least in these games. We will consider this point in some detail in the nextchapter.89CHAPTER 9.CONCLUSIONS AND IMPLICATIONS.In this chapter, we outline the implications of the results of this study in the specificcase of ultimatum and dictator games, and more generally for the study of justice. In lightof some unexpected results a revised model of justice is also proposed.We first turn to a discussion of the impact of these results on explanations ofbehaviour in ultimatum games.I. RESEARCH ON ULTIMATUM AND DICTATOR GAMES.Forsythe et al., (1994) suggested that the key to a convincing explanation. of theultimatum game lay in an explanation of the dictator game. For example, large offers indictator games would suggest that fear of rejections is not the only motive driving largeultimatum offers. But the difference in offer sizes in the two games gave an estimate of theextent to which fear of rejections stimulate larger offers.Dictator offers in this study were ‘smaller than ultimatum offers. Thus, fear ofrejections played some part in increasing ultimatum offer sizes. But dictator offers were stillconsiderably larger than zero. Also, though dictators shaded their partial information offersless than ultimatum offerers, there was still a significant difference between their partial andcomplete information offers. This is interesting and somewhat unexpected. Though fear ofrejections cannot explain this effect, larger complete information offers are consistent withthe notion that people want to be evaluated as fair. Where respondents can evaluate the90.fairness of offers, in complete information conditions, dictator offerers made larger offers.This suggests that advertising a fair self-identity holds value for them. A fair identity is alsoof value to ultimatum offerers since offers formulated by fair people may be less likely tobe rejected. In the past we suggested that impression management efforts were directedtoward influencing the respondent to accept offers (e.g., Pillutla and Murnighan, 1995a).This may not be totally accurate. The current results suggest that high ultimatum offerstrategies may be based on the fear of rejection i impression management.Another interesting finding was the similarity of the rejections in ultimatum anddictator games. Dictator rejections did not affect the payoffs to offerers; they cannot beexplained in terms of equity restoration. Researchers have explained rejection of ultimatumoffers as efforts to punish offerers’ unfair behaviours (Guth and Van Damme, 1995),especially if administering this punishment did not cost much (Pillutla and Murnighan,1995b). But punishment cannot explain the rejection of dictator offers. Possibly they weretoo small to matter. They may have insulted respondents.The rejection of so many of the small offers and a substantial minority of largeroffers might suggest that the offers were not large enough for our participants and that therejections can be explained in terms of their lack of value. This non-emotional explanation,however, does not match previous data (Pillutla and Murnighan, 1995b). Further, if theoffers held no value for respondents, they should have also rejected the partial informationoffers. This did not happen. Thus, it seems more likely that small offers insulted dictatorrespondents whose only recourse for reestablishing their wounded pride was rejection.This suggests that viewing ultimatum rejections as equity restoration may also be too91narrow. In both ultimatums and dictator games, rejections of small offers may be a way forrespondents’ to affirm their self-worth and dignity.In addition to providing a model that can be used to organize the empirical data onultimatum and dictator games (and the fairness explanations that go along with them), thisstudy provides some information about the nature of the learning mechanisms that arebecoming the focus of some recent work in game theory (e.g., Gale, Binmore andSamuelson, 1995). Some scholars have suggested that since game theoretic assumptions ofperfect rationality are merely a shorthand for the learning process that social systems andindividuals go through when interacting, it may be useful to incorporate learning mechanismsin game theory’s models (Gale, Binmore and Samuelson, 1995; Roth and Erev, 1995).Simulations of ultimatum bargaining games have revealed that over several rounds,behaviours begin to resemble theoretical predictions, though not necessarily subgame perfectequilibrium behaviour (Gale, Binmore, and Samuelson, 1995), although these results aresensitive to initial conditions (Roth and Erev, 1995). Our ultimatum bargaining resultssuggest that these new models’ assumptions about learning i.e., players are stimulus-responsemechanisms who are more likely to repeat behaviours that have got them good outcomes inthe past, may be correct. Also, Gale et al., 1995, conclude that ultimatum bargainingbehaviour may not approach subgame perfect equilibrium even in the long run because thepressure to refrain from rejecting small offers is less than the pressure on offerers to makelarge offers. The assumption is that the cost of rejecting a small offer is less than the costof making a small offer that is rejected. The validity of this assumption seems to be borneout by our data. In addition to the cost of possible rejection there is a also a limit on how92small an offer can realistically be, due to social norms. People almost never make epsilonoffers. In fact, positively valued offers by dictators and the rejection of small dictator offerssuggest that game theoretic assumptions of strict maximization of outcomes are unrealistic.In sum, the results of this study show that large offers in ultimatum bargaining maybe due to fears of rejection and impression management. Dictators also make larger offersfor impression management reasons. Respondents’ rejections may be due to a desire topunish offerers and to affirm their own dignity.The findings from ultimatum and dictator games have important implications for thestudy of justice. People’s rejections of offers that could not affect the outcomes of theofferers, but nevertheless insulted them, raises an important issue for the study of justice:How do those affected by an injustice who have no control on the outcomes of theperpetrator of an injustice react? Any conceptualization of justice restoration that requiressome effect on the perpetrators of an injustice (e.g., the retributive justice theory of Hoganand Emler, 1981) needs to be broadened. Also, the idea that impression management andfear of rejections (or more generally fear of retaliation) are conceptually distinct suggests thatimpression management based explanations of justice (e.g., Jellison 1981; Jellison andGentry, 1978) need not assume that people seek fair (or more generally any other favourable)identities only because of the material rewards associated with them.We now turn to a discussion of the implications of these results for the model thatwas proposed originally.93II. MODELS OF JUSTICE.Most of the theoretical underpinnings of this research assume that people aremotivated by self-interest and that their seemingly fair behaviours can be explained in termsof self-interest. Lerner’s model presented a contrasting view, suggesting that a concern forjustice is the preeminent motive that guides behaviour. We argued that both positions werecorrect by differentiating between the motives of actors who were in different roles in theseallocation situations. We also suggested that these roles were associated with differentamounts of relative power, and that power in an allocation relationship may determinemotives. We defmed behaviour that appeared fair as strategic when the salience of fairnessor personal dependence influenced behaviour. Behaviour that was consistent across all thesesituations (i.e., information, fairness salience and outcome interdependence) was defined astruly fair behaviour, i.e., due to an underlying motive for fairness. We then designed anexperiment to distinguish between the strategic use of fairness and fairness as an underlyingmotive. We also considered the possibility that stable behaviour or systematic variationsmay have nothing to do with fairness at all. Thus, as a first step we established that fairnessplays some role in the decision making process by establishing that people’s offers andresponses had a strong relationship with their fairness ratings.People who felt that offers needed to be large before they could be considered fairwere more likely to make larger offers and more likely to reject small offers. This suggeststhat fairness, either as a motive or as a strategy, was part of the decision making set of ourparticipants.The first major conclusion of the study, that offerers use fairness strategically and94respondents are concerned about avoiding injustice, directly supports the role model ofjustice motives. Our data suggests that people’s motives did depend on the roles. that theytook in these interactions. Future research may test whether these fmdings (and the model)generalize to other allocators and recipients.Power also led to a number of interesting patterns of behaviour. Since power wasnot the central focus of this research, the findings are only suggestive and inferential. Theydo provide a number of ideas for future research.The first analyses of variance comparing offers made in the partial and completeinformation conditions, before and after fairness ratings, and before and after responsesindicated that offers depended on the game, i.e., whether it was an ultimatum or dictatorgame. Dictator offerers did not shade their partial information offers as much as ultimatumofferers; their offers were not much smaller after they had first been a respondent; and theydid not increase their offers if they had made fairness ratings prior to making offers. Thissuggests that ultimatum offerers may be more strategic than dictator offerers.Dictators had no monetary incentive to be strategic, instead they could entertainconcerns for fairness in any of the experiment’s conditions. This implies that outcomeinterdependence may be a crucial explanatory variable in allocation situations: outcomeinterdependence may lead people to be concerned about their own payoffs, and to strategicbehaviour to maximize those outcomes. Self-interest then becomes dominant. Withoutoutcome interdependence, however, strategy is unnecessary, outcomes to self are alwaysassured, and other possibly, altruistic motives, may surface. People may then seek toestablish an identity as a fair person, weakening their inclinations to take advantage of95information asymmetry and act strategically.Thus, the second conclusion of this study, that powerful allocators may not be asstrategic, in the absence of outcome interdependence, as they are when they face outcomeinterdependence, suggests that we may have to revise our model of justice motives. Theresults reported by Tjosvold (1981) also support the need for revision. He has shown thatin a dyad where two parties have unequal power, the effects of power on mutual trust,generosity, and liking depends on whether the situation is defined as cooperative orcompetitive. In cooperative contexts with large power differences, the powerful actorsattempt to maximize joint gain. In competitive contexts they try to maximize their owngains. In dictator games the absence of outcome interdependence may have resulted in thepowerful actor (the offerer) not defining the context as competitive; interdependence mayhave led the less powerful ultimatum offerer to defme the situation more competitively,warranting the use strategic action to maximize their outcomes. This suggests the possibilityof an information processing or cognitive explanation to the difference in motives. Theultimatum game may evoke a competitive or strategic script and the dictator game may evokea less competitive script. Though it appears that dictator offerers are less strategic thanultimatum offerers, they still made lower offers than ultimatum offerers, even when theirideas about fair offers (i.e., the fairness ratings) were about the same as those of ultimatumofferers. Though the lack of interdependence may have resulted in dictator offers not beingstrategic, they were apparently still self-interested.The conclusions about the non-strategic behaviour of dictator offerers suggests thatin addition to roles, the other important determinant of the salience of a motive may be96power (interdependence). A revised justice model would then suggest that the relativesalience of the fairness or the self-interest motive would depend on both roles andinterdependence. For actors in weak recipient roles, the fairness motive is very salient. Forallocators, outcome interdependence (power) may determine their motives: when theiroutcomes depend on another person, they may defme the situation competitively andtherefore act strategically to maximize their own outcomes. When their outcomes do notdepend on another person, they may behave less strategically.The idea that the ultimatum bargaining exercise evokes a strategic script can be testedby asking people to make dictator offers after they have made a series of ultimatum offers;these offers can be compared to conditions where people make only dictator offers. Ifultimatum games induce strategic scripts, dictators who have just been ultimatum offerersshould act more strategically and offer recipients less.Only two levels of interdependence were present in this study: dictator and ultimatumofferers were at the two extremes of interdependence, making generalization to otherintermediate levels of dependence difficult. The absence of interdependence may result insome discontinuity in offerers’ strategic behaviour i.e., strategic behaviour may be presentat all levels of interdependence and absent only in the total absence of interdependence. Onthe other hand, it is also conceivable that non-strategic behaviour is present at all levelsexcept in conditions of total dependence. To get a better understanding of the effects ofpower, it may be necessary to create settings of intermediate interdependence.The restrictive nature of our definition of power must also be noted. The definitionof power as the inverse of dependence would suggest that ultimatum offerers have almost as97much power as ultimatum respondents. Viewed this way, offerers and respondents shouldobtain close to the same payoffs. This is clearly not the case. Even participants’ ratings offairness are biased in the direction of offerers. Participants seem to recognize that offerershave more power in these games. It may thus be useful to consider Stevens’ (1963)defmition of negotiation power. According to Stevens (.1963), negotiation power refers tothe advantages gained through tactical moves of the game (e.g., making crediblecommitments or bluffmg). Bargaining power, according to this conceptualization, refers tothe advantage based on a priori outcome values in the game structure. From thisperspective, in both ultimatum and dictator games, offerers have much more negotiationpower (because the credible commitment has already been built into the structure of the gameby making the offer irrevocable) than respondents and dictators have more bargaining power(because of lack of interdependence) than ultimatum offerers. Using this conceptualizationof power to organize our data, we can conclude that those with the most bargaining power(i.e., dictator offerers) use less strategic power than those with less bargaining power (i.e.,the ultimatum offerers)While we have been focusing on the relative size of offers in different experimentalconditions, we have not addressed the issue of why sizable offers are made at all in thepartial information conditions, particularly in dictator games, or why partial informationoffers increase as the amount being divided increases, both in ultimatum and dictator games.While the observations are consistent with the notion that people are concerned about howtheir behaviour is perceived, i.e., impression management, positive partial information offersalso imply the presence of fairness in the decision making process of offerers. Positively98valued partial information offers might be interpreted as the base rate of a fairness standardthat is internalized by participants; any offer exceeding that standard, due to the experimentalconditions, is indicative of impression management and strategies for maximizing one’s ownoutcomes. Similarly, the fact that respondents accepted operationally defined large offersthat were still smaller then their fairness estimates but rejected most operationally definedsmall offers suggests that the absolute value of the offer does matter, independent of fairnessconcerns. If a concern for fairness was the only motive driving responses, respondentswould have rejected even the larger offers (which were unfair by their own definitions). Therejection of small offers may signify that, for these respondents, an acceptable thresholdexists between 50 cents and $2.50. Below the threshold avoiding unfairness overwhelms theself-interest motive; above the threshold self-interest overwhelms the concern to avoidunfairness. This threshold may vary across people or populations.This suggests that both fairness and self-interest motives are present for offerer andrespondent. The relative importance, not presence, of the motive as a detenninant ofbehaviour seems to depend on the person’s role, the structure of the game and their potentialeconomic benefits.Several broad theoretical issues have emerged from this study. First, distinguishingbetween underlying causes of fair behaviours seems to be both possible and theoreticallyuseful. Second, structural factors such as roles and interdependence have a large impact onmotives and behaviours, thus leading to the conclusion that past studies that have found oneor the other motive to be dominant can be now be integrated within a framework thatincludes both self-interest and fairness concerns and others, such as the competitive or99cooperative nature of the task. Third, while studying the impression management aspectsof apparently fair behaviours, it may be useful to study whether people value having a fairidentity independent of instrumental purposes. Fourth, when studying reactions to injustice,traditional explanations such as equity restoration need to augmented by explanations thatfocus on the dignity, self worth and emotions of injustice recipients.Finally, it may be more useful to study the boundaries of the justice and self-interestmotive rather than try to establish that one motive is more basic than the other. Forexample, according to our model, the self-interest motive is salient for allocators ofresources and the justice motive is salient for the recipients of these allocations. Similarly,Deutsch (1982) identified structural features such as the competitive versus cooperative orthe formal vs. informal nature of the context as affecting the salience of motives. This isalso the position advocated by Leventhal (1980) who has identified roles that people take(e.g., judge or juror, labour mediator etc.,), the importance of other goals, and themonolithic or pluralist structure of the social system as factors affecting the salience of thejustice motive.Delineating the boundaries within which the justice motive is salient has implicationsfor organizational justice theories too. A situational model of justice, like the one wepropose, would also represent managers’ allocation behaviours and their effects onsubordinates better than any position that states that justice is either a goal for or a strategyof the manager. In organizations where managers must allocate resources, justice is just oneof the many issues that they may take into account. Other motives may also be salient andjustice may be used as a strategic device used for attaining the objectives of other salient100motives. But when people are at the receiving end of an allocation, justice is invariably acentral concern, at least for themselves.Turning to some of the more practical implications of this study, we can suggest fromour observation of the behaviour of dictator offerers that the structurally advantaged maytemper their strategic behaviour if they do not define the situation as competitive. If thestructurally advantaged are assured of their outcomes, more altruistic or less strategicmotives may influence their behaviour. For example, in a collective bargaining scenario aweak labour union may declare that they will not exercise their right to strike. Thenemployers’ outcomes are not as dependent on the actions of the union and this may resultin the employer defining the situation as cooperative. Employers may then behave lessstrategically and the weak union may actually reap larger benefits than they might frommore traditional, adversarial bargaining.From the observation that offerers make smaller offers after they have responded tosmall (unfair) offers, we can suggest that negotiators best avoid bargaining with powerfulparties who have had bad outcomes in their prior negotiations. Though we do not know forcertain whether their reactions depend on learning or anger, they do seem to lower theirsubsequent offers. This alone is enough to suggest that it may be wise to avoid those whohave been treated unfairly earlier in a similar activity.If negotiators are informed about the effects of roles, or more generally theinteractional structure of motives, they may be less likely to misunderstand others’ positionsand preferences in bargaining situations. Also, they may better understand their ownmotives. Together, this may reduce costly disagreements.101We chose a stark scenario to show the presence of asymmetric motives in anallocation exercise. In the fairly simple case of ultimatum and dictator games, the offerersgauged the motives of respondents fairly accurately and behaved accordingly. In real worldsituations it may not be as easy to gauge negotiators’ motives. In such cases it is possiblethat people may conclude that others in the situation have similar motives. Our modelsuggests that this is not the case. Thus, it would be essential to have information about thegeneral structural conditions within which the justice motive arises. Our model can be seenas the first step in providing such information.102CHAPTER 10.PROPOSAL AND DESIGN FOR FUTURE STUDIES.A number of issues have come up during the course of this study that might beexamined in future research. Some have arisen because of unexpected results. Others aredue to the factors that were deliberately ignored to keep the experimental design simple. Wediscuss a few proposed studies which might investigate some of these issues.The studies follow from the idea that the salience of the justice motive is situationspecific and that it is possible to identify the conditions in which the justice motive is likelyto be salient. As in the current study we use ultimatum and dictator games to check someof the predictions. We first discuss studies that test whether the explanations given for theunexpected results are empirically valid.I. UNEXPECTED RESULTS.a. Offers following responses were less than the offers in any other condition. Weexplained this result by focusing on the fact that the offers to respondents were smaller thantheir perception of what constituted a fair offer. If respondents saw larger offers, they mightalso make larger offers. A design that varies the offers to respondents could also providesome insight into whether it is anger or strategic learning that drives offer behaviourfollowing responses.The stable fairness ratings in this study could be used to predetermine a set of offersthat are systematically above and below fairness estimates. The offers could range from one103standard deviation above and one standard deviation below the average fair offer. Peoplecould respond to offers when the amount being divided is $10, $20, $30 and $400; then theywould make offers dividing these four amounts. The small offers would be $2, $4.35, $6:65and $64.04 when $10, $20, $30, and $400 was being divided respectively. The large offerswould be $5.40, $11.27, $15.8, and $203.34 when $10, $20, $30 and $400 were beingdivided. The design would include four groups, as follows:Group 1 Respond to small offers, then offerGroup 2 Respond to large offers, then offerGroup 3 Respond to both large and small offers, then offerControl Offer.The learning hypothesis would be supported if people accepted the small offers andmade smaller offers when it was their turn to make offers and accepted the large offers andmade larger offers when it was their turn to make offers. We can infer strong support forthis hypothesis if the participants in group 3 accept all offers and make small offers. All thecomparisons are with the control group.The anger hypothesis would be supported if people rejected the small offers and madesmall offers. Large offers should not cause anger, should be accepted, but should have noexplanatory power in the formulation of subsequent offers. It is not clear what theparticipants in group 3 would do if they were angered by the small offers. Presumably, thisanger would be muted by the presence of the larger offers.104This study would also be the first to provide information about whether the ultimatumfindings about rejections of offers (that are unfair) applies to large sums.b. The fairness ratings did not differ in any of the experimental condition. Weexpected people to rate the offers they had made as fair and to make offers that they hadrated as fair. Thus, we expected smaller offers to be rated as fair if ratings followed makingoffers. This did not happen. Participants provided stable fairness estimates, indicating thatthere may be a stable norm for what constitutes fairness in these contexts. The literature onego-centric biases in fairness judgements (e.g., Messick and Sentis, 1978 and Lowensteinand Thompson, 1992) indicates that people make fairness judgments that overestimate theirinputs and underestimate the inputs of referent others. (This bias is also linked to inefficientoutcomes in negotiations.) Asking people to make fairness judgements from their positionas offerers or respondents might have led to more ego-centrically biased estimates: offerersmight have claimed that smaller amounts were fair and respondents might have claimed thatoffers needed to be larger to be fair. These speculations can be tested in a study where wesystematically vary the role that people take when making fairness estimates. The designwould be as follows:Fairness ratings A refers to ratings made in the role of the respondent. Fairnessratings B refer to the ratings made in the role of the offerer.Group 1 Fairness ratings A OfferGroup 2 Offer Fairness Ratings A- 105Group 3 Fairness ratings B OfferGroup 4 Offer Fairness Ratings BSpecific predictions in this design include: fairness ratings in the role of respon4entswill be higher than fairness ratings in the role of offerers, offers that follow ratings made inthe role of respondents will be larger than offers made after ratings made in the role ofofferers, and fairness ratings made in the role of respondents before malcing offers will belarger than fairness ratings made in the role of the respondents after making offers.The predicted ordering of offer sizes would be:Group 1 > Group 3.Group 2 = Group 4.•For ratings:Group 1 > Group 3.Group 2.Group 4.c. Ultimatum offerers are more strategic than dictator offerers. We speculated thatultimatum offerers may have defmed the situation as competitive while the dictator offerersdid not. If the competitive script is evoked for dictator offerers then they may be strategictoo. To test this hypothesis we could ask participants to make ultimatum and dictator offerswhen the amount to be divided is $10, $20, $30 and $400. The design for the study wouldbe as follows:106Group 1 Ultimatum offers Dictator offersGroup 2 Dictator offers Dictator offersTo control for learning effects, participants in group 2 would make as many dictator offersas group 1 ultimatum and dictator offers.The hypothesis is that dictator offers following ultimatum offers would be lower thanonly dictator offers.II. EXTENSION TO OTHER CONTEXTS.A number of key situational variables were ignoied in the current study to make therole model of justice motives simple and easily testable. Some of the key variables includethe relative resource level of participants prior to the allocation process and the number ofpeople involved in the allocation exercise. We outline tests for these variables in thissection.a. A contextual variable that has been shown to have an effect on social motives isrelative resource advantage or disadvantage. For instance, MacCrimmon (1973) found thatpeople who were at a relative resource advantage with their partners displayed cooperativeor altruistic motives and less self-interested behaviour when they liked their partners. Theydisplayed self-interested behaviours when they were at a relative resource disadvantage evenwhen they liked their partners. Relative wealth may have a similar effect on justice motives.107Offerers with relative resource advantage may be less strategic than offerers who aredisadvantaged in terms of relative resources.In the context of ultimatum games, we can operationalize different levels of relativeresources by asking all participants (who will’ be asked to take on the role of offerers) toperform a task that is not relevant to ultimatum bargaining, and paying one sub group ofpeople of a sum of money (say $5). These people would be in the relative resourceadvantage group. Those who have not been given the money would the group withoutrelative resource advantage; they will be disadvantaged compared to other offerers, but willnot be at a relative resource disadvantage compared to respondents.We define strategic behaviour similar to the current study: Smaller partial informationthan complete information offers and larger offers fairness has been made salient. (i.e., afterfairness ratings).Offerers would make offers when the amount to be divided is $10, $20, $30, and$400. They would also make fairness ratings for these amounts. The ordering of offer andrating would be systematically varied. All offerers would make partial followed by completeinformation offers.The design would be as follows.Group 1 (Offerer with relative resource advantage) Offer Rating.Group 2 (Offerer with relative resource advantage) Rating Offer.Group 3 (Offerer without relative resource advantage) Offer Rating.Group 4 (Offerer without relative resource advantage) Rating Offer.108We expect that offerers who are advantaged with respect to resources will not be asstrategic as the offerer who is not advantaged. Similarly, there would be no effect of therating on the offer and the offer on the rating for the advantaged, but these effects will beseen for those who are disadvantaged. Note, that we do not expect relative resourceadvantaged offerers to take less for themselves (i.e., in terms of the initial endowment plusthe amount - their offer). We only hypothesize that the difference between partial andcomplete information offers will be greater for those who are not resource advantaged, andthat only those who are not resource advantaged will make larger offers when fairness ismade salient for them.b. Generalization to an n-person situation. The current study looked at themotivational processes underlying justice behaviour in two person exchanges. The motivesunderlying n-person allocations can be more complex. Most of the strategic motives that weimputed to offerers in the current study were based on self-interest. In n-person allocationsituations, strategic considerations may be also be based on wanting to boost groupproductivity, increase group solidarity and avoid revolt, or other motives.The distinction we have to make here is justice as a goal versus justice as a norm thatneeds to be followed versus justice as an interpersonal strategic device. A number of studieshave shown that allocators in n-person situations make allocations depending on whether thegroup goal is solidarity or productivity (e.g., Deutsch, 1975), or to stimulate performance(e.g., Greenberg and Leventhal, 1976). None of these studies reported the reactions of therecipients of these allocations. Nor do they consider that the allocator may be motivated109purely by self-interest. The imputed motives of the allocators are consistent with our rolemodel of justice motives. We would further argue that the motives of recipients in thesecontexts will be to avoid injustice.Note that the distinction that we made in the current study, i.e., justice as a goalversus self-interest as a goal, enabled us to design an experiment which could distinguishbetween fairness as a goal and fairness as a strategy. In an n-person allocation exercise, itmay also be possible to distinguish strategic behaviour due to self-interest from strategicbehaviour due to norms (which is only indirectly self-interested). We focus only on theformer and distinguish it from a fairness as a goal. This is partly because, the distinctionbetween behaviour motivated by norms and by a concern for justice as a goal has beeninvestigated in past research (e.g., Greenberg and Leventhal, 1976).Again, we hypothesize that justice will be a strategy for the allocator, while injusticeavoidance will be a goal for the recipient.We give below a description of games that are n-person analogues of ultimatum anddictator games i.e., interdependence between allocators and recipients vary over the differentgames.Game 1. (Ultimatum analogue). An offerer is given a sum of money (say $10). S/he canoffer the money to two respondents (say $3 to each of the respondents). The tworespondents can either accept or reject the offers. They cannot negotiate for more. If bothaccept the offers, they get their offers and the offerer gets the remainder (10-(2X 3) = 4).Even if one respondent rejects the offer, no one gets anything. VGame 2. (Dictator analogue). An offerer is give a sum of money (say $10). S/he can offer110the money to two respondents. The two respondents can either accept or reject the offers.They cannot negotiate for more. The offerer gets the remainder (i.e., the initial moneyminus the offers) even when one or both respondents reject the offer.Game 3. (Hybrid game). It is the same as game 1 except that only one respondent needs toagree for the offerer to get his/her payoff.The three games differ in terms of the dependence of the offerer on the respondents.Guth and Van Damme (1994) studied a restricted version of game three. In their game, therespondent whose accept or reject decision affected the allocators’ outcomes werepredetermined i.e., one respondent knew that only s/he could accept or reject the offer, andif s/he rejected it all three players received nothing. Their results showed that respondentsrejected any offer that gave them a small payoff. The payoff to the other respondent did notmatter. Thus, the motive of the respondent seemed to be to avoid injustice to self and to notbother about the injustice to the other respondent.In the proposed study, participants would make offers dividing $10, $20, $30 and$400 in both partial and complete information. All participants would know the amountsbeing divided in the complete information conditions. Neither respondent would not knowhow much was being divided in partial information conditions. Partial informationconditions would always precede complete information offers. Unlike the current study, wewould not predetermine the offers that respondents receive, because we do not know whatthe typical offers are in these kinds of games. Also, allocator and recipient roles and thegames would be between subject variables. People would be asked to make fairness ratings111and this would serve as the experimental manipulation of fairness.We define strategic behaviour similar to the current study: Smaller partial informationthan complete information offers, larger offers when fairness salience has been raised (i.e.,after fairness ratings) and larger offers when offerers are dependent on respondents for theiroutcomes. Similarly, any increase in rejection of offers on account of the increased fairnesssalience will indicate that fairness was not a central concern of respondents.The design is shown in Table 13.Some hypotheses are-1) Allocations to both respondents after the fairness ratings will be larger than thosemade before.la) The increase in offer-size after fairness ratings will be larger for the game withinterdependence (game 1) than for the game without interdependence (game 2)2) Allocations will be smallest in cases where the respondents have no control over theallocators outcomes (game 2), and largest in the condition where the respondents havecontrol over the offerers outcome (game 1).3) Complete information offers will be larger than partial information offers.3a) Allocators will take more advantage of information asymmetry when they aredependent on respondents for their outcomes (game 1), than when they are not(game 2).4) Respondents will reject more complete than partial information offers.5) Respondents’ rejections will not be different in the condition where they respond tooffers after fairness rating compared to conditions where they respond to offers112before rating...In this experiment, the intermediate dependence condition (i.e., game 3) will providemore information about the role of power on motives. For example, we can see whether theallocators are more or less strategic with information than allocators in game 1, and whetherthey increase their offers more or less than those in game 1. More pointedly, we will beable to see whether the two respondents are dealt with differently.The dissertation was motivated in part by our observation of offerers and respondentsin ultimatum games (Pillutla and Murnighan, 1995a and 1995b). When we debriefedparticipants in these studies, both offerers and respondents raised issues of fairness. Butofferers actions were often inconsistent with our views of fairness as consistent behaviouracross situations. For example, they made smaller offers when the respondent did not knowhow much was being divided. Respondents, on the other hand seemed to get emotionalwhen they rejected small (unfair) offers. It seemed as though there was an asymmetry in themotives of offerers and respondents. We turned to the literature on justice to seek anexplanation for this asymmetry and found that this asymmetry may be true for allocators andrecipients in general. We then formulated a model of justice that took into account the roleof actors in explaining their motives and tested it out with ultimatum and dictator games.Our results indicated support for the model.The proposed studies outlined here expand the model by adding other structuralfeatures such as relative resource levels and interdependence to explain the salience ofjustice113motives. One study attempts to extend the model to n-person allocation situations, whichis arguably the more common situation in society in general and organizations in particular.The core assumption of the model, however, remains the same- various roles and contextsevoke different cognitive scripts which are then used as a basis for action. Justice motivesare a class of cognitive scripts and are thus role and context specific.114FOOTNOTES.1. In a decomposed game, the interdependence is reduced only perceptually. One playercan determine the payoffs to himself/herself and to the other person at the time of thedecision. But, a similar choice is made by the other person. Thus, the decomposed gameis a presentation strategy that leads a player to believe that s/he has complete control overthe outcomes to himself/herself and the other with whom s/he is in the exchange.Objectively, the two persons’ choices will determine their payoffs, just like in two person,two choice matrix games.2. Although, offers increased as the amount being divided increased, such an effect heldlittle interest. Thus, we partialed out the effects of these increases by including the amountsbeing divided as a covariate in the analyses. As they were independently manipulated, usingamounts as covariates is feasible (Maxwell and Delany, 1990). This analysis also avoids theheterogeneity of variance that would have resulted if the amounts had been included as avariable. Of course, the assumption for the analysis is that all the regression coefficients ofthe amounts (covariate) with the offers (dependent variable) are equal.3. When using amounts as covariates in the MANOVA analysis, we make an assumption thatall within group slopes are equal (i.e., the homogeneity of regression assumption). Whenthis assumption is violated, as is the case for the current sample, the power of the MANOVAto detect differences is reduced. This is because the error term is larger than the error term115that will result if the assumption of homogeneous regression slopes is relaxed (Maxwell andDelany, 1990, p 416). Thus, for the purposes of this study, we will consider alpha levelsless than .1 as indicating that the null hypotheses can be rejected.4. There were two large and two small offers in both the partial and complete informationconditions. The logistic regression procedure, which is the appropriate procedure to use ifthe dependent measure is categorical and the independent variable is continuous, does notallow for the specification of multiple dependent measures. So we randomly numbered oneof the small offers as small offer 1 and the other as small offer 2. Large offers were alsorandomly numbered as large offer 1 and large offer 2.5. CATMOD is a procedure for categorical data modelling. It fits linear models to functionsof response frequencies. We used the weighted least squares method for the estimation ofparameters. This method minimizes the weighted residual sum of squares for the linearmodel. CATMOD computes a statistic that is approximately distributed as chi-square fortesting hypotheses about linear combinations of the estimated parameters. This method isparticularly appropriate for repeated measure designs where the dependent variable iscategorical (SAS Users’ Guide, 1985, 172-174).116ReferencesAdams, J. 1963. 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Berkowitz (Ed.),Advances in Experimental Social Psychology. 42, 608-618.TABLE1.EXPERIMENTALDESIGNFORULTIMATUMGAMES.Gp.IGp.flGp.fflGp.IVGp.VGp.VIOfferRateRespondRateOfferRespondRespondOfferRateRespondRateOfferRateRespondOfferOfferRespondRate124TABLE2.EXPERIMENTALDESIGNFORDICTATORGAMES.Gp.IGp.IIGp.IIIGp.IVGp.VGp.VIOfferRateRespondRateOfferRespondRespondOfferRateRespondRateOfferRateRespondOfferOfferRespondRate125TABLE3:MEANULTIMATUMOFFERSINTHEVARIOUSEXPERIMENTALCONDmONS.$10$20$30$400fCompPCompCompPCompMean%Offer3.864.767.129.4410.1213.0977.88159.1531.02FirstOffer2.704.004.897.526.7811.4460.67132.8725.29AfterRespondOffer4.054.557.808.5010.4513.20126.00164.8036.89AfterRateOffer2.644.294.417.556.5911.8269.95134.5526.28After Respond&RateOffer3.394.416.308.159.3112.4591.57157.0532.31AfterRate&RespondMean%33.6244.2930.8741.7129.0641.4920.9537.56126TABLE4:FREOUENCIESOFRESPONDENTS’ACCEPTANCESOFULTIMATUMOFFERSINTHEVARIOUSEXPERIMENTALCONDITIONS:PartialInformationCompleteInformationSmallOffersLargeoffersSmall OffersLargeoffersNFreqFreq%Freq%Freq%Respond3640.008392.223033.337280.0090FirstRespond2352.283784.091329.543681.8244AfterRateRespond1027.783186.11719.443391.6736AfterOfferRespond615.002870.0000.002460.0040afterrate&offerRespond1443.752681.25515.632686.6732afteroffer &rate.127128TABLE 5: MEANS OF FAIRNESS RATINGS IN ULTIMATUM GAMES IN TIlEVARIOUS EXPERIMENTAL coNDmoNs.$400 Mean %Rating 3.97 7.55 11.88 139.61 35.6FirstRating 3.36 6.88 10.82 117.32 30.09AfterRespondRating 4.25 8.50 12.44 170.63 42.57AfterOfferRating 4.13 7.87 11.22 148.48 37.33AfterRespond& OfferRating 3.12 6.59 10.25 118.89 30.16AfterOffer &RespondMean % 37.91 37.47 37.95 34.56TABLE6:MEANDICTATOROFFERSINTHEVARIOUSEXPERIMENTALCONDITIONS.$10$20$30$400PrCompPCompCompCompMean%Offer3.504.235.958.528.0911.6789.41133.7530.85FirstOffer2.503.564.646.726.119.8356.61109.7821.71AfterRespondOffer3.643.786.507.288.4211.17127.22127.2228.13AfterRateOffer3.354.536.538.599.3912.24109.59156.7633.80AfterRespond&RateOffer2.533.034.385.506.158.0368.2699.7421.48AfterRate&RespondMean31.6338.8228.2637.4525.6435.8220.9331.63129TABLE7:FREOUENCIESOFRESPONDENTS’ACCEPTANCESOFDICTATOROFFERSINTHEVARIOUSEXPERIMENTALCONDITIONS:PartialInformationCompleteInformationSmallOffersLargeoffersSmallOffersLargeoffersFreq.%Freq.%Freq.%Freq.%NRespond3144.285274.281724.285477.1470FirstRespond1544.123090.911132.353088.2334AfterRateRespond1544.122470.591029.413088.2334AfterOfferRespond1130.552775.00822.222775.0036afterrate&offerRespond1860.002790.001343.382583.3330afteroffer&rate130131TABLE 8: MEANS OF FAIRNESS RATINGS IN DICTATOR GAMES IN THEVARIOUS EXPERIMENTAL CONDITIONS.$400 Mean %Rating 3.60 7.07 10.97 119.90 30.77FirstRating 3.66 8.12 12.18 151.18 38.09AfterRespondRating 3.83 8.33 10.67 130.67 33.37AfterOfferRating 3.72 8.45 11.00 140.58 35.60AfterRespond& OfferRating 4.00 7.91 11.65 142.94 36.20AfterOffer &RespondMean % 37.34 39.07 37.48 33.55132TABLE 9 OVERALL MANOVA TABLE FOR ULTIMATUM AND DICTATOROFFERS IN ALL EXPERIMENTAL CONDITIONS.TREATMENT DF F SIGNIFICANCEINFORMATION1 1, 864 127.42 .000SEQUENCE2 5, 863 2.52 .028GAME3 1, 863 3.92 .048SEQUENCE BY GAME 5, 863 2.85 .014SEQUENCE BY 5, 864 0.70 .626INFORMATIONGAME BY INFORMATION 1, 864 6.12 .014SEQUENCE BY GAME BY 5, 864 0.40 .848INFORMATION1 Information includes partial and complete information.2 Sequence includes the six different ordering of the three tasks: Offer, Response, Rating.3 Ultimatum & Dictator games.TABLE10:MANOVATABLEFORULTIMATUMOFFERSINALLEXPERIMENTALCONDITIONS.ULTIMATUMSDICTATORSTREATMENTDFFpDFFpINFORMATION11,46279.31.0001,40253.35.000SEQUENCE25,4613.11.0095,4012.30.044CONTRASTi1,2113.52.0621,1970.03.866CONTRAST21,2224.18.0421,1973.34.069INFORMATIONBY5,4620.69.6345,4020.36.875SEQUENCE1Informationincludespartialandcompleteinformation.2Sequenceincludesthesixdifferentorderingofthethreetasks:Offer,Response,Rating.3Thecontrast betweenthegroupswhereoffersweremade prior toratingandthose inwhichoffersweremade afterrating.4Thecontrast betweenthegroupswhereoffersweremadeprior torespondingandthoseinwhichoffersweremadeafterresponding.133134TABLE 11: CATMOD ANOVA TABLE FOR ACCEPTANCE/REJECTION OF SMALLAN]) LARGE OFFERS IN ALL EXPERIMENTAL coNnmONS.TREATMENT DF X2 pINFORMATION 1 40.80 .00OFFER SIZE 1 788.31 .00SEQUENCE 5 6.37 .28GAME 1 0.04 .84INFORMATION BY 1 15.57 .00OFFER SIZEGAME BY SEQUENCE 5 3.30 .59135TABLE 12: RESULTS OF THE LOGISTIC REGRESSION ANALYSIS USING THEFACTOR SCORES OF FAIRNESS RATINGS AS PREDICTORS OF RESPONSES OFLARGE AND SMALL COMPLETE INFORMATION ULTIMATUM AND DICTATOROFFERS.Ultimatum.Dependent Variable Std. Error SignificanceSmall Offer 1 -0.229 0.225 .309Small offer 2 -0.525 0.228 .021Large Offer 1 -0.738 0.276 .008Large Offer2 -0.709 0.298 .018Dictator.Dependent Variable Std. Error SignificanceSmall Offer 1 -0.409 0.225 .069Small Offer 2 -0.372 0.222 .094Large Offer 1 -0.707 0.321 .027Large Offer 2 -0.62 1 0.292 .034TABLE13:DESIGNFORPROPOSEDN-PERSONALLOCATIONEXPERIMENT.Game1Game2Game3UltimatumAnalogueDictatorAnalogueHybridOffer/RespRateafterOffer/RespRateafterOffer/RespRateafterafterRateOffer/Respafter RateOffer/RespafterRateOffer/RespAmountInformationDividedPartial$10CompletePartial$20CompletePartial$30CompletePartial$400Complete136Figure1:Theoriesof JusticeINJUSTICEJUSTICE1.Thetheoriesintheupperhalfof eachquadrantrefertoallocatorsandtheonesinthelowerhalftorecipientsC137138Appendix.An Exercise in Negotiation.This exercise is meant to study how people make decisions in negotiations. You will makea series of choices. There are no right or wrong answers here: we are merely interested instudying how people like you make these kinds of decisions. The time necessary forcompletion of the exercise is at most one hour.Please remember that your participation in this exercise is strictly voluntary. You maywithdraw any time you wish. If you complete the exercise we will assume that you haveconsented to participate and consented to our use of your anonymous choices. There is noneed to put your names or ID on any part of the exercise.Six people in today’s group will be chosen by lottery to receive monetary payments. Thepayments will depend on your decisions and those of other people participating in theexperiment. We will pay you immediately after the exercise. THUS, THERE IS NONEED FOR YOU TO PUT YOUR NAME ANYWHERE ON TilE FORMS. All yourchoices will be anonymous and will be coded and analyzed anonymously.If you have questions at any time during or after the exercise please ask the experimenterorcall either of us.Prof. J. Keith Murnighan. (604) 822 8427Madan Pillutla (604) 669 7498139Today’s Date and Time. -In this exercise we would like you to make a series of choices.PART IYour task will be to make a real monetary offer to another person. You will divide a fixedamount of money any way you like, offering this other person part of the fixed amount ofmoney in different conditions. There will be four different amounts in Part I and you willbe making offers to four different people. We won’t be telling you who the other personsare going to be. We will not tell the other persons who you are. We will also not tell themhow much money we gave each of you.You will never meet them or see them or ever find out who they are. If they accept youroffer, you may both get the money, as it’s been divided, if they reject it, you get nothingand the other person gets nothing. We will recruit a volunteer who will choose whether toaccept or reject one of your offers. S/he will never know who you are. You will neverknow who s/he is.Please make each of your offers as if it will actually be given to some other person. Why?Because we will choose one of you to be the winner, at random, and will also randomlychooseone of your offers to determine how much money you will receive. We will use a lotteryto select six people from today’s group to receive monetary payoffs. The offers you make,then, may determine whether and how much real money you will win.The task is to divide the money, offering any part of it to another person. If this otherperson accepts your offer, he or she will get what you offered them (in cash) and we willreturn to you and pay you the remaining portion of the fixed amount. If the other personrejects your offer, you both get nothing. That’s it. It’s very simple. Make an offer,dividing the money any way you like. If you are the winner, one of your offers will bedelivered to someone, and your monetary outcome will depend on whether they accept orreject your offer.There will be other choices in Parts II and III that may also determine how muchmoney you will receive. If you have any questions anytime, please ask--we’d like to be surethat everyone is clear about everything.When you finish Part I, please stop and wait for everyone else. You’ll hit a page markedSTOP. When everyone is finished, we’ll go over the instructions for the other parts.Choice #1The other person does not know the amount you are dividing.You are dividing $10.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $10.)140141Choice #2The other person does not know the amount you are dividing.You are dividing $20.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $20.)142Choice #3The other person does not know the amount you are dividing.You are dividing $30.How much do you keep for yourself?______How much do you offer for the other person?___ _(These should add up to $30.)143Choice #4The other person does not know the amount you are dividing.You are dividing $400.How much do you keep for yourself?_______How much do you offer for the other person?_(These should add up to $400.)STOP HEREWAIT UNTIL EVERYONE ELSE IS FINISHED AND YOU ARE TOLD TO GO ON TOPART I A.144PartIAThis time when you divide the money, the other person will know how much youare dividing.As before, the other person will never know who you are.Choice #5The other person knows the amount you are dividing.You are dividing $10.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $10.)145Choice #6The other person knows the amount you are dividing.You are dividing $20.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $20.)146Choice #7The other person knows the amount you are dividing.You are dividing $30.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $30.)147Choice #8The other person knows the amount you are dividing.You are dividing $400.How much do you keep for yourself?How much do you offer for the other person?(These should add up to $400.)STOP HEREWAIT UNTIL EVERYONE ELSE IS FINISHED AND YOU ARE TOLD TO GO ON TOPART II.148PART IINow it’s your turn to Accept or Reject offers.We gave another person fixed amounts of money. We won’t tell you who they are. You alsowon’t know how much money we gave each of them. They were asked to divide the moneybetween you and them. They will never know who you are. You can accept or reject theiroffers. If you accept the offer, you may both get the money as it has been divided. If youreject the offer, you and the other person get nothing.In each case, you will not know the amount the other person isdividing.Choice #9S/he offered you 40 centsDo you Accept or Reject?Choice #10S/he offered you 50 centsDo you Accept or Reject?149Choice #11S/he offered you $2.35Do you Accept or Reject?150151Choice #12S/he offered you $2.55Do you Accept or Reject?STOP HEREWAIT UNTIL EVERYONE ELSE IS FINISHED AND YOU ARE TOLD TO GO ON TOPART II A.THERE WILL BE FURTHER INSTRUCTIONS BEFORE YOU BEGIN PART II A.152Part II AFor your next choices, we will be telling you theamount that the other person was given to divide--aswell as what they are offering you if you accept.Everything else remains the same. Each offer wasmade by a different person. None of the peoplemaking offers in Part II are the same as the peoplemaking offers in Part II A.Choice #13The other person was given $10 to divide.S/he offered you $2.50Do you Accept or Reject?Choice #14The other person was given $10 to divide.S/he offered you $2.75Do you Accept or Reject?153Choice #15The other person was given $10 to divide.S/he offered you 55 cents.Do you Accept or Reject?154Choice #16The other person was given $10 to divide.S/he offered you 60 centsDo you Accept or Reject?155156Under the conditions of Part II, would you accept any amount?Yes or NoIf not, what is the lowest amount you would accept?(NOTE: PLEASE TAKE THIS SERIOUSLY. YOUR ANSWER INDICATES THATYOU WOULD REJECT ANY OFFER LESS THAN THE AMOUNT YOU SPECIFY.WOULD YOU REALLY REJECT LESS? IF YOU MUST SAY, “NO, I WOULDSTILL TAKE IT,’ THEN YOU SHOULD SPECIFY A LOWER AMOUNT.)$_____STOP HEREWAIT UNTIL EVERYONE ELSE IS fiNISHED AND YOU ARE TOLD TO GO ONTO PART ifi.157PART IIIFor the following decisions, we have indicated how much another person is dividing. Ineach case, you should indicate the amount that you think is fafr. Everything else remains thesame as in Parts I and II. If the offer is accepted then both get the money as it has beendivided. If the offer is rejected, both get nothing.Choice #17When $10 is the amount that the other person was dividing, what is the lowest possibleamount for an offer that you would still regard as fair?$__________a158Choice #18When $20 is the amount that the other person was dividing, what is the lowest possibleamount for an offer that you would still regard as fair?$__________159Choice #19When $30 is the amount that the other person was dividing, what is the lowest possibleamount for an offer that you would still regard as fair?$__________160Choice #20When $400 is the amount that the other person was dividing, what is the lowest possibleamount for an offer that you would still regard as fair?$161BEFORE WE FINISH WE WOULD LIKE YOU TO GIVE US A FEW DETAILS ABOUTYOURSELF.1) GENDER__________2) ETHNIC ORIGIN_____3) AGE4) OCCUPATION OF PARENTS5) ARE YOU EMPLOYED?IF YES TO THE ABOVE THEN,A) HOW MANY HOURS ON AN AVERAGE IN A WEEKB) NATURE OF JOBC) AVERAGE EARNINGS/WEEKTHANK YOU VERY MUCH FOR PARTICIPATING IN THE EXERCISE.


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