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Equity theory and fair inequality: a neuroconomic study

Cappelen, Alexander W.; Eichele, Tom; Hugdahl, Kenneth; Specht, Karsten; Sørensen, Erik Ø.; Tungodden, Bertil
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URI
http://hdl.handle.net/11250/296612
Date
2015-08
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  • Discussion papers (SAM) [578]
Abstract
The present paper reports results from the first study designed to examine

the neuronal responses to income inequality in situations in which

individuals have made different contributions in terms of work effort. We

conducted an experiment that included a prescanning phase in which the

participants earned money by working, and a neuronal scanning phase in

which we examined how the brain responded when the participants evaluated

different distributions of their earnings. We provide causal evidence

of the relative contribution of work effort being crucial for understanding

the hemodynamic response in the brain. We found a significant hemodynamic

response in the striatum to deviations from the distribution of income

that was proportional to work effort, but found no effect of deviations from

the equal distribution of income. We also observed a striking correlation

between the hemodynamic response in the striatum and the self-reported

evaluation of the income distributions. Our results provide the first set of

neuronal evidence for equity theory and suggest that people distinguish between

fair and unfair inequalities.
Publisher
SAM
Series
Discussion paper;19/15

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