Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2012:10: Social context and fairness perceptions: The role of status

Konstanze Albrecht (), Emma von Essen (), Armin Falk (), Klaus Fliessbach () and Eva Ranehill ()
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Konstanze Albrecht: University of Bonn, Germany, Postal: Center for Economics and Neuroscience, Zentrale wissenschaftliche Einrichtung der Universität Bonn, Nachtigallenweg 86, 53127 Bonn,
Emma von Essen: Dept. of Economics, Stockholm University, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Armin Falk: University of Bonn, Germany, Postal: Center for Economics and Neuroscience, Zentrale wissenschaftliche Einrichtung der Universität Bonn, Nachtigallenweg 86, 53127 Bonn,
Klaus Fliessbach: University of Bonn, Germany, Postal: Center for Economics and Neuroscience, Zentrale wissenschaftliche Einrichtung der Universität Bonn, Nachtigallenweg 86, 53127 Bonn
Eva Ranehill: University of Zurich, Switzerland, Postal: University of Zurich, Department of Economics, Blümlisalpstrasse 10, CH-8006 Zurich

Abstract: This study investigates how induced relative status affects fairness perceptions measured by satisfaction from different relative payoffs. We find that participants with lower status are less dissatisfied with disadvantageous payoff inequalities than equal or higher status participants. In contrast, when receiving an advantageous payoff, status does not influence satisfaction. Our findings suggest that relative social status has important implications for the acceptance of income inequalities.

Keywords: status; fairness perceptions; satisfaction

JEL-codes: A13; C91; D31; D63

21 pages, July 19, 2012

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