Self-serving interpretations of ambiguity in other-regarding behavior

Abstract

We demonstrate that people can adopt a favorable view of ambiguous risks relative to ones with known probabilities, contrary to the usual attitude of ambiguity aversion, when doing so permits justification for unfair behavior. We use binary dictator games involving a choice between a relatively equitable allocation and an "unfair" allocation that is both less generous and makes the recipient's payment dependent on a p=0.5 lottery. Dictators choose the unfair option more frequently when the recipient's allocation depends on an ambiguous lottery than on a lottery with a known probability -- even though the objective distributions of outcomes are identical under the two kinds of lotteries. Dictators' estimates of the expected value of the recipients' allocations are inflated under ambiguity, indicating that dictators form self-serving beliefs about ambiguity. Finally, increased unfair behavior under ambiguity is extinguished when dictators are constrained by their own initial unmotivated, and negative, attitudes towards ambiguity.Ambiguity Social preference Fairness Dictator game Altruism