The Lab for Social Decision-Making & Risk

In customer or labor markets raising prices or cutting wages is perceived as unfair if it results from the exploitation of shifts in demands. In a series of manipulations we show that adding an alternative to the original choice set alters the perception of fairness of the final outcome. Adding a worse alternative lowers the perception of unfairness, whereas adding a better alternative raises the perception of unfairness. These findings supplemented with existing experimental evidence cast doubt on purely outcome-based theories of fairness and suggest that fairness perceptions are highly manipulable.