fairness

procedural justice

fairness of the process used to make decisions, rather than the outcomes themselves

procedural justice is the best predictor of their:

• affective reactions to an outcome

• willingness to accept an outcome

procedural justice is judged based on

• process control

• neutrality

• trustworthiness

• standing

process control

opportunity to present arguments/evidence

neutrality

judgements of bias, honesty, and factual decision making

trustworthiness

pureness of decision maker’s motives

standing

politeness and respect for rights

reference transaction

a relevant precedent that’s characterized by a reference price or wage

principle of dual entitlement

both parties in a transaction are entitled to their reference points, and gains by one party should not be financed by losses by the other

gain/loss framing and fairness

• losses & steady baseline = unfair

• lack of gain & increasing baseline = fair

profit protection

it’s considered fair for companies to protect themselves from losses even if consumers are inconvenienced

exploiting market power is “unfair”

supply & demand leads to price gouging

why do we care to be fair?

fear of retribution/punishment

when introducing fairness as an incentive…

people aren’t fair