Fairness of the Crowd - An Experimental Study of Social Spillovers in Fairness Decisions

This paper reports from a large-scale experiment conducted to study the effects of social norms on distributive decision-making. In an incentivized spectator experiment, subjects chose how to divide bonus earnings between a pair of stakeholders. Before choosing a distribution, our spectators stated their beliefs about, and received a signal about, the share of payoff-equalizing spectators in a reference group, randomly drawn from a previous study with the same distributive setting (Almås et al., 2020). This draw gives random variation in the intensity of the signal about the norm that applies in the current setting. We find a statistically significant but small effect of the number of payoff-equalizing spectators in the reference group on the probability of equalizing payoffs in the current setting. The redistribution choice is strongly correlated with spectators’ initial beliefs about the reference group. The effect of the signal about redistribution is primarily driven by the subgroup of participants who receive a large shock to their initial beliefs.