Discuss Fairness in Decision Making by assignment help experts

by Vikrant G. Assignment help experts

Fairness in Decision Making

Experimentally noticed deviations of behavior from game theoretic predictions indicate that fairness does influence decision-making. Fairness in terms of equality has become an indispensable element of economic models directing at explicating actual behavior. Theories given by Fehr/Schmidt 1999 and Bolton/Ockenfels 2000 make use of an optimization approach assuming fully rational behavior of economic agents (Schmidt, 2000). On the other hand from video experiments and other experimental studies, it is identified that there are more fairness norms than equality. To study how fairness influence decision making, video experiments of the ultimatum game, the tripled take game, and an alternating offer bargaining game are analyzed.

Different fairness norms exist even in one game, and that fairness norms also differ across games, due to which decision-making is also influenced. Consequently, it appears to be problematic to design all-purpose models based on one explicit fairness concept only as an explicating factor for behavior. This is the usually the case since the self-seeking bias in fairness percepts stimulates players to be channelized by contradicted fairness norms and hence may obstruct agreement (Schmidt, 2000). The impact of fairness on decision-making can be depicted effectively with the case of the bargaining game, in which there is no attempts of subjects to optimize. Rather than this, subjects exhibits goal-directed behavior.

Fairness in terms of equity is the leading principle in ambition formation and plays a significant role in ambition adaptation. In regard to the ultimatum and the tripled take game it appears that the fairness norm(s) being comprehended as valid in the various situation functions as a central point which in turn serves as a point of direction for approximating the opponent’s and recognition limit (Robert, 2004). Further analyses in this concern are essential to elucidate this phenomenon and become aware with the influence of fairness on decision-making.

References

Robert, E.R. (2004). SSA Disability Decision Making: Additional Steps Needed to Ensure Accuracy and Fairness of Decisions at the Hearings Level. USA: DIANE Publishing.

Schmidt, H. H. (2000). The Impact of Fairness on Decision Making – An Analysis of Different Video Experiments. Retrieved from http://www.nek.lu.se/ryde/20symp00/Papers/henning.pdf