Strategic Ignorance and Ethical Behavior in Organizations

A large amount of empirical literature has demonstrated that people will often choose outcomes close to equality, in games or disputes, rather than unequal outcomes that favor themselves. This behavior will henceforth be referred to as “fairness.” Various formulations of social utility theories explain such behavior as reflecting a preference for fair outcomes. Decision makers are assumed to gain utility not only from their own payoffs but also from others’ payoffs. I will ultimately argue that this interpretation is incomplete because it ignores a factor that, while auxiliary to social utility, is virtually always present in its evidentiary support. Namely, the decision maker is responsible for determining the other party's payoff.