Date of Original Version

6-3-2008

Type

Article

Abstract or Description

We demonstrate that people can adopt a favorable view of ambiguous risks – contrary to the usual attitude of ambiguity aversion – when doing so permits justification for unfair behavior. We use simple binary dictator games in which one participant in a pair chooses between two allocation options for herself and an anonymous recipient. The “fair” option gives both participants relatively equal allocations, while the “unfair” option gives more to the dictator, less to the recipient, and also makes the recipient’s allocation dependent on a p=0.5 lottery. Dictators choose the unfair option more frequently when the recipient’s allocation depends on an ambiguous lottery than on a lottery with a known probability – even though the objective distributions of outcomes are identical under the two kinds of lotteries. Further, dictators’ estimates of the expected value of the recipients’ allocations are inflated under ambiguity, indicating that dictators form self-serving beliefs about ambiguity. Finally, increased unfair behavior under ambiguity is extinguished when dictators are constrained by their own initial unmotivated, and negative, attitudes towards ambiguity.

DOI

10.1016/j.geb.2009.08.002

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Published In

Games and Economic Behavior.