An experimental examination of alternative theories of distributive justice and economic fairness

This dissertation provides evidence from controlled laboratory experiments that, in contrast to Frohlich and Oppenheimer's widely quoted results, supports Rawls' (1971) conjecture about the use of the maximum decision rule or "difference principle" in the original position. In addition, focal points defining alternative levels of poverty are examined to determine whether this additional information affects the selection of rules of distribution in an experimental original position. The basic experimental approach developed by Frohlich and Oppenheimer (1992) is used in this dissertation to examine whether existing theories of distributive justice are consistent with observed decisions on the selection of alternative rules used to distribute income. My experiments are focused on a design where subjects are required to perform tasks to earn income as opposed to the income being exogenously determined. In addition, the instructions are purged of any references to justice or fairness that might influence subject behavior. The baseline experimental design utilized in this study was found to replicate the results obtained by Frohlich and Oppenheimer, who found no support for a Rawlsian rule of distribution. Two experimental treatments were performed to investigate questions on the selection of floor income levels and the role of risk aversion. Both treatments were found to significantly affect the results. The first treatment investigated the impact of giving the subjects information on alternative measures of need or poverty. These focal points were found to significantly narrow the distribution of floor constraints selected by groups of subjects. The second treatment introduced a random chance of excluding subjects from the production tasks, thereby thickening the "veil of ignorance". This "exclusion" treatment manipulated a factor related to the subjects' risk preferences and was found to dramatically shift the distribution of rules selected by the subjects. The exclusion treatment found significant support for both Rawlsian and egalitarian rules of distribution. Finally, to examine the effectiveness of our experimental design in inducing impartial decisions, we performed multinomial logit regressions on both group and individual decisions. The results suggest that our design was effective, since individual characteristics were unable to explain the group decisions