Do those who allocate resources know how much fairness will matter to those who receive them? Across seven studies, allocators used either a fair or unfair procedure to determine which of two receivers would receive the most money. Allocators consistently overestimated the impact that the fairness of the allocation procedure would have on the happiness of receivers (studies 1–3). This happened because the differential fairness of allocation procedures is more salient before an allocation is made than it is afterward (studies 4 and 5). Contrary to allocators’ predictions, the average receiver was happier when allocated more money by an unfair procedure than when allocated less money by a fair procedure (studies 6 and 7). These studies suggest that when allocators are unable to overcome their own preallocation perspectives and adopt the receivers’ postallocation perspectives, they may allocate resources in ways that do not maximize the net happiness of receivers.Discussion
Allocators must decide how to allocate things of value to people who value many things, including efficiency and fairness. To balance these concerns, allocators must look forward in time and try to imagine what the world will look like to people who are looking backward. As our studies show, this is a challenge to which allocators do not always rise. Allocators in our studies consistently overestimated how much the fairness of a procedure would impact receivers’ happiness (studies 1–3), and thus mistakenly concluded that receivers would be happier with less money that was allocated fairly when receivers were actually happier with more money that was allocated unfairly (studies 6 and 7). When allocators and receivers swapped temporal perspectives, allocators avoided this mistake (study 4) and receivers made it (study 5).
Before discussing what these results mean it is important to say what they do not mean. These results do not mean that receivers care little or nothing about fairness. Indeed, literatures across several social sciences show that fairness is often of great importance to receivers. Rather, our studies merely suggest that however much receivers care about the fairness of a particular allocation procedure in a particular instance, the allocator’s perspective is likely to lead him or her to overestimate the magnitude of that concern. In everyday life, the importance of the resources being allocated will vary and so the importance of fairness will vary as well. What is less likely to vary, however, is the perspectival difference between the allocator and the receiver. Allocators must always choose allocation procedures before receivers react to the results of those procedures and as such, the allocator’s illusion is likely to be a problem across a wide range of circumstances.
That range is wide indeed. From dividing food and estates to awarding jobs and reparations, the problem of allocating resources is ubiquitous in social life. In the last half century, mathematicians have devised numerous solutions whose colorful names—the cake-cutting algorithm, the sliding knife scheme, the ham sandwich theorem—reveal both their origins and purpose. These procedures are complex and varied, but all have two goals: fairness and efficiency. When these goals are at odds, it is up to the allocator to determine the so-called “price of fairness”, which is the amount of efficiency that should be sacrificed to ensure a fair allocation. The problem with all of the mathematically ingenious solutions to this conundrum—and indeed, with many of the less ingenious solutions that people deploy in government, business, and daily life—is that they naively assume that allocators can correctly estimate how much receivers will care about fairness once the allocation is made. As our studies show, allocators often cannot make these estimates correctly. Even when allocators and receivers have identical beliefs about which procedures are most and least fair, those beliefs inform their judgments at different points in time—before the allocation is made for allocators, and after it is made for receivers—and time changes how much fairness matters. Our studies suggest that when allocators fail to recognize this basic fact, they may pay too high a price for fairness.