The Psychological Foundations of Social Preferences and Fairness Concerns

The question

People routinely judge outcomes not only by what they receive, but also by whether they consider those outcomes to be fair. These fairness concerns shape behavior in countless situations, from wage negotiations and workplace cooperation to charitable giving, political support for redistribution and environmental protection. Despite decades of research, two fundamental questions remain unanswered: Why do people differ so widely in their concern for fairness and the well-being of others? And what standards do they use to judge whether an outcome is fair?

Answering these questions has proven remarkably difficult. Economists have long recognized that people evaluate outcomes relative to salient reference points — that is, benchmarks against which gains, losses and fairness are judged. Yet identifying these reference points from observed behavior remains one of the field’s major unresolved challenges. Likewise, although social preferences have been extensively studied, their psychological foundations are still largely unknown.

The approach

The Psychological Foundations of Social Preferences and Fairness Concerns project combines insights from economics and psychology to address both challenges. First, the researchers are investigating how personality traits and emotional dispositions shape two fundamental dimensions of inequality aversion: discomfort with having more than others and discomfort with having less than others. Using representative samples of Swiss adults, the project combines incentivized economic experiments with validated measures of personality, empathy and envy. This approach will provide comprehensive evidence on the psychological origins of these key social preferences.

Second, the team is developing a new framework for identifying the reference points people use when evaluating whether outcomes are fair. Rather than assuming exogenously given ideas of fairness, the researchers are inferring individuals’ fairness ideals directly from their decisions and estimating how strongly these ideals influence behavior relative to material self-interest. This approach addresses one of the central unresolved problems in the study of social preferences.

Ultimately, the project aims to establish an empirically sound scientific framework for understanding how people form fairness judgments and make social decisions. By uncovering both the psychological origins of social preferences and the standards people use to evaluate outcomes, it will advance fundamental theories of human behavior and social interaction. The methods developed in this project may also help researchers study reference points and comparisons in other areas of economics and the social sciences, offering new insights into how people navigate complex social environments.

The project is being led by Ernst Fehr at the University of Zurich in Switzerland.