Inequality Biases Third-Party Evaluation of Decision-Making for Others

Abstract

People often need to make risky decisions for others, especially in policymaking, where a single decision can affect the welfare of a number of people. Given that risky decisions can yield variable outcomes and that people often evaluate policies after knowing the outcomes, the same risky policy can be evaluated differently depending on its outcome. Nevertheless, very little is known about how people make third-party evaluations of risky policies. Because people are sensitive to inequality among others, we predicted that the same policy would be evaluated more negatively if it leads to inequality rather than other outcomes. To examine this, we conducted a scenario experiment on risky and sure policies and investigated whether people’s distributive preferences moderated policy evaluation. We show that participants rated the risky policy lower when it yielded unequal situations between the recipients. Interestingly, participants did not evaluate the risky policy higher than the sure policy even when the risky policy yielded more desirable outcomes. In addition, participants who preferred sure distributions as decision makers or recipients showed the inequality aversion, whereas participants who preferred risky distributions showed no such pattern. Our results suggest that policy evaluation may be susceptible to the risks and inequality of outcomes among recipients.