Thirteenth International Conference on Interdisciplinary Social Sciences

Abstract

The Just World Hypothesis (JWH) posits that people are motivated to believe that the actual rules of their world are fair. An implication of the JWH is that people will adjust their beliefs about fairness toward actual rules, when beliefs are endogenous and diverge from the prevailing rules. We formulate a theory of distributive preferences in which beliefs about the fair rule are endogenous and based on two possible rules, equity (i.e., proportionality to contributions) and equality (i.e., equal splits). We test the theory with a natural field experiment conducted in Ethiopia in which participants work over a two week period under either equal or equitable pay rules. The behavioral and questionnaire results are consistent with the predicted adjustment of beliefs about fair pay toward actual pay. Specifically, worker productivity shifts in ways that are not predicted by models of self-interest or stable fairness preferences.