HOW MANIPULABLE ARE FAIRNESS PERCEPTIONS? THE EFFECT OF ADDITIONAL ALTERNATIVES

In customer or labor markets raising prices or cutting wages is perceived as unfair if it results from the exploitation of shifts in demands. In a series of manipulations we show that adding an alternative to the original choice set alters the perception of fairness of the final outcome. Adding a worse alternative lowers the perception of unfairness, whereas adding a better alternative raises the perception of unfairness. These findings supplemented with existing experimental evidence cast doubt on purely outcome-based theories of fairness and suggest that fairness perceptions are highly manipulable.