UNTVERSITY OF CALIFORNIA AT BERKELEY Department of Economics Berkeley, CaHfornia 94720-3880 Working Paper No. 97-251 Psychology and Economics Matthew Rabin Department of Economics University of California, Berkeley January 1997 Key words: bounded rationality, decision making, fairness, framing effects, heuristics and biases, preferences, psychology, reciprocity, reference-dependent utility JEL Classification: A12, B49, D i l , D60, D81, D83, D91 This is a longer version of an essay under preparation for possible publication in the Journal of Economic Literature. I thank John Pencavel and anonymous referees for earlier comments on its structure and content. For comments on this draft, I thank Steven Blatt, Colin Camerer, Peter Diamond, Erik Eyster, Ernst Fehr, Danny Kahneman, George Loewenstein, Ted O'Donoghue, and John Pencavel. For helpful conversations over the past several years on topics covered in this essay, I thank George Akerlof, Gary Chamess, Eddie Dekel, Peter Diamond, David Laibson, David I. Levine, George Loewenstein, Rob MacCoun, James Montgomery, Vai-Lam Mui, Drazen Prelec, and especially Colin Camerer, Danny Kahneman, and Richard Thaler. Co-authors on research related to the topics of this essay include David Bowman, Deborah Minehart, Ted O'Donoghue, and Joel Schrag. Helpful research assistance was provided by Gadi Barlevy, Nikki Blasberg, Gail Brennan, Paul Ellickson, April Franco, Marcus Heng, Bruce Hsu, Jin Woo Jung, and especially Steven Blatt, Jimmy Chan, Erik Eyster, and Clara Wang. I am extremely grateful for financial support from the Russell Sage and Alfred P. Sloan Foundations.

https://www.jstor.org/stable/pdfplus/2564950.pdf

Psychology and Economics

AUTHOR Leventhal, Gerald S TITLE What Should Be Done with Equity Theory? New Approaches to the Study of Fairness in Social Relationships SPONS AGENCY National Science Foundation, Washington, DC PUB DATE Sep 76 GRANT GS-3171 NOTE 52p;,To appear as a chapter in Gezgen, KO, Ed, And Others, "Social Exchange Theory," John Wiley, 1977 AVAILABLE FROM Dr Gerald S Leventhal, Department of Psychology, Wayne State University, Detroit, Michigan 48202 (free)

/pdf/what-should-be-done-with-equity-theory-new-approaches-to-the-57k7iropom.pdf

What Should Be Done with Equity Theory? New Approaches to the Study of Fairness in Social Relationships.

A taxonomy is presented that categorizes theories of organizational justice with respect to two independent dimensions: a reactive-proactive dimension and a process-content dimension. Various theories within each of the four resulting categories are identified. The implications of the taxonomy are discussed with respect to clarifying theoretical interrelationships, tracking research trends, and identifying needed areas of research.

/pdf/a-taxonomy-of-organizational-justice-theories-2cg90xlja6.pdf

A Taxonomy of Organizational Justice Theories

Two psychological theories consider why people care about justice. The social-exchange-based resource model argues that people want to maximize the resources they obtain from social interactions, a goal that they believe is facilitated by following rules of distributive and procedural justice; the identity-based relational model suggests that people attempt to maintain high status within groups and use the justice of their experiences to evaluate their group status. Two studies on reactions to experiences with authorities ― legal and managerial ― examine the influence of these motives on (a) people's evaluations of the distributive and procedural justice of their experiences and (b) affective and behavioral reactions to those experiences

Psychological models of the justice motive: Antecedents of distributive and procedural justice.

This paper evaluates numerous positive and normative theories of justice in positive terms, i.e., in terms of how accurately they describe the impartial fairness preferences of real people. In addition, the paper proposes and defends an integrated justice theory based on preferences over four distinct and sometimes conflicting forces. These forces frame the analysis of the individual theories and inspire four corresponding theoretical classes: equality and need, utilitarianism and welfare economics, equity and desert, and context. This synthesis enables one to treat justice rigorously and to reconcile results that often appear contradictory or at odds with alternative theories.

/pdf/which-is-the-fairest-one-of-all-a-positive-analysis-of-xd5lpl25xj.pdf

James W. Michaels

Papers

Inequity and interpersonal conflict: reward allocation and secrecy about reward as methods of preventing conflict.

Locus of cause and equity motivation as determinants of reward allocation.

Extending the Equity Model: Perception of Inputs and Allocation of Reward as a Function of Duration and Quantity of Performance.