More Satisfaction, Less Equality: Distributive Effects of Transparent Needs in a Laboratory Experiment.

Societies are confronted with the dilemma that need satisfaction requires transparent individual needs. We study the effect of information about others' needs on the distribution of a joint endowment in a three-player network exchange game in a laboratory experiment. Need levels are exogenously given and either transparent (known to all three network members) or opaque (only known to the players themselves). The three players negotiate in dyads until two players agree on a distribution. We expect that the transparency of need thresholds raises need satisfaction but lowers equality. The results suggest that the members of the dyad who agree on the distribution can satisfy their own need thresholds even when information about thresholds is opaque. The effect of transparency on the remaining network member is antithetical: while transparency increases the rate of need satisfaction, it decreases the average share of allocations when needs are low. In the opaque condition, allocated shares are larger, but need satisfaction is lower. This reveals the ambivalent distributive effects of transparent need thresholds: Transparency helps those with the highest need thresholds, but it can hurt those with lower need thresholds, and it barely affects the ones with the most influence on the decision. Supplementary Information: The online version contains supplementary material available at 10.1007/s11211-024-00434-0.

The impact of need on distributive decisions: Experimental evidence on anchor effects of exogenous thresholds in the laboratory.

Giving more to those who need more has an intuitive appeal for determining the just allocation of resources. The need principle is considered one of the three major principles of distributive justice. In contrast to equality or equity, however, evidence on the adherence to the needs principle rests mainly on stated instead of revealed preferences. In this paper we present an experimental design that exogenously assigns objective, heterogeneous need thresholds to individuals in small laboratory societies structured by a three-line network. The data reveal that a large proportion of individuals respond to others' need thresholds, but at a declining rate as thresholds increase. The equal distribution marks a discrete drop in the need satisfaction rate: Need thresholds above the equal distribution are less frequently satisfied. We conclude that others' needs are weighed against self-interest and equality. Our results provide evidence that distributions may be socially justified on grounds of the need principle.

Offers beyond the negotiating dyad: Including the excluded in a network exchange experiment.

Based on the assumption of self-interest, allocations in network exchange models and experiments are typically restricted to negotiating dyads. Network members beyond the dyad are excluded by design from a share of the divided resource. Social value orientation may, however, induce subjects to allocate parts of the resource to third network members. We experimentally study three-person networks in which subjects can make bilateral offers that allocate payoff shares to all network members. Our results show that subjects give on average ten percent of the bargaining value to third network members if they have this option. The concern for third network members is moderated by social values: the stronger the social value orientations of the deciding individuals, the more payoff is allocated to third network members. We conclude that fairness is an important initial motivator that affects the way in which structural power is used in network exchange.