Collected milestones in fairness literature

tungodden cappelen
‘These papers show that the fairness motive is essential for understanding human behavior in a wide range of settings, such as markets, bargaining, and redistributive situations’, Professor Bertil Tungodden (left) says. Here at the NHH cafeteria with Professor Alexander W. Cappelen. Photo: Helge Skodvin
By Sigrid Folkestad

8 February 2019 08:37

Collected milestones in fairness literature

In their new research collection, «The Economics of Fairness», Alexander W. Cappelen and Bertil Tungodden present forty key contributions on fairness.

A growing literature in economics has studied how fairness considerations shape human behavior.

last four decades

This research collection, «The Economics of Fairness», at The International Library of Critical Writings in Economics series - comprises forty key theoretical and empirical contributions spanning the last four decades, along with influential related work in normative economics.

‘These papers show that the fairness motive is essential for understanding human behavior in a wide range of settings, such as markets, bargaining, and redistributive situations’, Professor Bertil Tungodden says.

He is Centre Director at FAIR (Centre for Experimental Research on Fairness, Inequality and Rationality) at NHH.

«The Economics of Fairness» includes 40 articles, dating from 1975 to 2014.

what people view as fair

According to Tungodden and Professor Alexander W. Cappelen, the papers document large heterogeneity in what people view as fair and the importance people attach to fairness, displaying how a concern for fairness develops in childhood and manifests itself in the brain.

Accept growing inequalities

The differences between people in the USA have never been greater. Over the past decades, the richest have become even richer. A new study shows that Americans accept these inequalities to a much greater degree than Norwegians.

‘Economists have throughout history been interested in the idea of fairness, but from different perspectives. This book covers the development in our field since the 1970s, when economists primarily focused on the normative idea of fairness – what is a fair society. A seminal contribution by Nobel prize winners Daniel Kahneman and Richard Thaler, together with Jack L. Knetsch, «Fairness as a Constraint on Profit Seeking: Entitlements in the Market» (1986) showed the fundamental importance of fairness for understanding human behavior. This opened a new research agenda in economics’.

Long-overdue book

As reflected in their book, a key contributor to this field has been Ernst Fehr, who has shown how fairness motivation is key to understanding cooperation in society.

‘This is a long-overdue book on fairness – one of the most exciting topics in behavioral economics. Alexander Cappelen and Bertil Tungodden did a great job collecting the important milestones in this literature. From early normative accounts to recent empirical advances, this book organizes and presents all you need to know in order to understand how economists think about the topic,’ Professor Uri Gneezy, University of California, says.

FAIR-research

Researchers at FAIR are well-represented in «The Economics of Fairness»:

  • Ingvild Almås, Alexander W. Cappelen, Erik Ø. Sørensen and Bertil Tungodden (2010): «Fairness and the Development of Inequality Acceptance», Science
  • Alexander W. Cappelen, Astri Drange Hole, Erik Ø. Sørensen and Bertil Tungodden (2007): «The Pluralism of Fairness Ideals: An Experimental Approach», American Economic Review
  • Alexander W. Cappelen, Tom Eichele, Kenneth Hugdahl, Karsten Specht, Erik Ø. Sørensen and Bertil Tungodden (2014): «Equity Theory and Fair Inequality: A Neuroeconomic Study», Proceedings of the National Academy of Sciences (PNAS)