Far from fair: Social closeness affects the tradeoff between utility and fairness in decision-making

Theoretical Background

Social distance is the structuring metrics of human groups and societies, and social networks are organized in terms of closeness. Social “closeness has generally been understood as what distinguishes among relationship categories” (Aron, Aron, & Smollan, 1992, p.596). Social closeness fulfills our need for order in the social world (Fiske, 1992) by reducing complexity (Rosch, 1999). The social closeness construct is so pervasive that it has been shown to affect decision-making outcomes. For instance, Jones and Rachlin (2006) showed that people increasingly discount gains as social distance toward the recipient increases. In other words, the amount of foregone money to make someone else receive part of the utility increases if the recipient is socially close to the decision-maker. Interestingly, this social discounting function closely mimics the well-known time discounting phenomenon (Green & Myerson, 2004; Mazur, 1987). This suggest that benefits for a close social other are considered as more valuable than the same benefits for someone that is not close, as closer rewards are perceived as more valuable than distant ones. Another prominent example of the effect of social distance on decision-making was collected using the Ultimatum Game (Güth, Schmittberger, & Schwarze, 1982). Here, participants asked to make decisions on behalf of a third party accepted more favorable offers for socially closer third parties than for socially distant ones (Ruessmann & Topolinski, 2019). Such findings have profound implications, because they suggest that people are prone to overcome fairness concerns to let a socially close other benefit from the situation. This result mirrors the findings typically obtained with the minimal group paradigm (Tajfel, 1970; Tajfel, Billig, Bundy, & Flament, 1971). In several studies, participants were found to resolve the tradeoff between fairness and utility in favor of the latter more often when the receiver was an ingroup member compared to an outgroup member (Biella & Sacchi, 2018). Moreover, several findings suggest that more profitable decision outcomes are obtained when a close rather than a distant other is involved (Candelo, Eckel, & Johnson, 2018; Civai, Rumiati, & Rustichini, 2013; Sanfey, Rilling, Aronson, Nystrom, & Cohen, 2003).

All these remarkable findings suggest that fairness concerns weight less if the violation of the fairness norm (Schroeder, Steel, Woodell, & Bembenek, 2003) is beneficial for a socially close other. Such claim has strong practical and theoretical implications that create the demand for a proper experimental investigation. Unfortunately, previous research suffers from a severe confound. In particular, they involve (socially close) friends and (socially distant) acquaintances (Jones & Rachlin, 2006) or a known (socially close) person and a (socially distant) stranger (Candelo et al., 2018; Civai et al., 2013; Ruessmann & Topolinski, 2019; Sanfey et al., 2003). Therefore, social distance is confounded with acquaintance. The closer the other in this research, the higher is the probability that he or she shares a history of previous interactions with the participant. Consequently, decisions might be driven by the content of such interactions or might be influenced by factors other than social distance.

To resolve this confound, we propose to manipulate social distance experimentally (Biella, Rebholz, Holthausen & Hütter, in preparation). Our paradigm asks participants to play a simple online game with two unknown interaction partners. Therefore, acquaintance is not confounded with social distance. This procedure, the Interaction Game, relies on well-known social tie formation mechanisms (Sonnemans, van Dijk, & van Winden, 2006; Van Dijk, Sonnemans, & Van Winden, 2002; Van Dijk & Van Winden, 1997). Specifically, participants interact with two other players and, whenever two players mutually select each other, they score a point. One of the two alleged players selects the participant more often than the other.

Consequently, the first will be perceived as socially close and the second as socially distant. The procedure has been successfully validated in three pre-registered experiments (Biella, Rebholz, Holthausen & Hütter, in preparation). Additionally, the results of the experiments suggest that emotions are not affected by the game. This is a critical point, because emotions, in particular anger (Pillutla & Murnighan, 1996) and disgust (Sanfey et al., 2003), have been shown to affect decision-making.

Grant outcome

Thanks to this grant, we have been able to fund one pilot and 4 preregistered main experiments investigating how social closeness, manipulated via the Interaction Game, can affect decision-making. The pilot and the first main experiment allowed us to demonstrate that acquaintanceship-free social distance, manipulated via the Interaction Game, can induce a well-known social discounting effect (Jones & Rachlin, 2006). Specifically, 120 participants
discounted money differently for the close and the distant other showing clear signs of close-other favoritism. Experiments 2, 3, and 4 tested whether manipulated social distance in the absence of acquaintanceship or a shared history between the decision-maker and the receiver of the Ultimatum Game (Güth, Schmittberger, & Schwarze, 1982) can induce the close-other favoritism documented by Ruessmann and Topolinski (2019). In Experiment 2, 164 participants were asked to take part in the Interaction Game and later played the role of the decision-maker in a third-party Ultimatum Game. All participants evaluated proposers’ offers on behalf of a close and a distant receiver (induced via the Interaction Game) and displayed greater acceptance rate for unfair-advantageous offers directed to the socially closer receiver. This result, although more tenuous than expected, suggest that the Interaction Game is sufficient to push participants to resolve the tradeoff between fairness and utility in favor of the latter if utility is beneficial for the socially close other. In Experiment 3, 165 participants took part in a replication of Experiment 2 with receiver’s closeness manipulated between-subjects. This new design provided the same pattern found in the previous experiment, hence suggesting the same conclusion, with a substantially larger effect size. In Experiment 4, 170 participants took part in an experiment similar to the previous two with the modification that the proposer was not an anonymous player, but the other player involved in the Interaction Game (the socially close other when the receiver was the socially distant one and vice versa). In this experiment, we found evidence of increased compliance with unfair-disadvantageous offers made by the socially close proposer (directed toward the socially distant receiver) which induced increased acceptance in this region of the offer continuum. However, the acceptance rate for the same offer in the opposite condition remained low showing that if the socially close other is the receiver and the socially distant is the proposer, unfair-disadvantageous offers are still aversive. Moreover, in the opposite side of the continuum, the increased compliance with the close proposer produced increased acceptance for unfair-advantageous offer toward the distant receiver. This behavioral reaction celled out the effect found in our previous experiment in the region of unfair-advantageous offers. Additionally, Experiment 5 allowed us to investigate where fairness’ boundaries can be placed in the Ultimatum Game’s offer continuum. Here, we asked our 415 participants to evaluate proposers’ offers in a third-party Ultimatum Game based only on their sense of fairness.

Results from the initial pilot and the first main experiment will be added to the draft of an existing paper in preparation. Results from Experiments 2, 3, and 4 constitute a stand-alone paper on the effect of confound-free experimentally manipulated social distance on decision-making in the Ultimatum Game, and results from Experiment 5 will start a new line of research currently under development. Besides scientific publications, the results obtained thanks to this grant will be submitted as contributions to European and international social psychology conferences.

This grant allowed us to consolidate an experimental paradigm which was missing in the literature and that was pivotal in our subsequent experiments. Moreover, this grant provided the resources necessary to start a new line of research in which we demonstrated that perceived social distance is a key factor in both guiding behavioral reaction toward agents violating/complying with the norm of fairness and weighting the value of utility received by close or distant social agents.

References

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