Disadvantageous inequity-aversion (“envy”) is stronger under time pressure

Exploring the Role of Deliberation Time in Non-Selfish Behavior: the Double Response Method. Michał Krawczyk, , Marta Sylwestrzak. Journal of Behavioral and Experimental Economics, https://doi.org/10.1016/j.socec.2017.12.004

Highlights
•    We develop and apply a novel method for eliciting laboratory subjects’ preference
•    The method incentivizes providing a quick, intuitive response and a more thought-out response
•    We apply the method to the Charness & Rabin's choices measuring social preference
•    We find that disadvantageous inequity-aversion (“envy”) is stronger under time pressure

Abstract: In this paper, we explore the Double Response research method, in which, in each decision task, subjects supply one quick choice and one additional choice after a longer deliberation time. Assuming a simple dual-process framework, with the two modes of judgment running parallel to each other providing the decision-maker with their final estimates of the utility difference between the options, this method incentivizes the decision-maker to indicate which option they prefer in System 1 and which option is preferred in System 2. We apply the method to a series of simple decision tasks aimed at eliciting subjects’ social preferences (as in Charness and Rabin, 2002). We observe that time pressure leads to a negative attitude towards the earnings of other participants when they are higher than those of the decision-maker. In other words, deliberation decisions are typically updated towards those corresponding with lower aversion to disadvantageous inequality (“envy”).

Keywords: Response time; Design of laboratory experiments; Other-regarding preference; Inequality aversion

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The second contribution of the present study lies in the novel findings in the specific area of other-regarding behavior. As far as we know, the observation that a disadvantageous inequality aversion (as opposed to other motives to lower the payoff of another subject) is strengthened under time pressure is novel. Generally speaking, it contradicts the Social Heuristics Hypothesis of Rand and colleagues. One plausible explanation for this phenomenon is that the subject's own payoff initially appears to be low when compared to the high payoff the other subject is enjoying. With more deliberation time, subjects tend to find that, in fact, there is no reason not to let the other person earn a bit more money. This effect provides an alternative explanation to the findings of higher rejection rates in the Ultimatum Game played under time pressure, often understood in terms of emotion-driven revenge. Additionally, intuitive disadvantageous inequality aversion allows explaining ―hot-headed‖ behavior in situations in which no evil intentions can be attributed to the other party. For example, many drivers seem to change lanes much too often in heavy traffic. By doing so, they generally diminish their average driving speed and increase the risk of causing a collision without receiving any substantial benefit in terms of time saved. This is particularly puzzling in view of laboratory findings, such as a reluctance to exchange lottery tickets (Bar-Hillel et al., 1996), suggesting a strong status-quo bias. It could be that such drivers‘ behavior may be explained in view of its timing – typically one has to decide very quickly whether or not to change to another lane that temporarily seems to allow a quicker ride. If this time pressure puts drivers in a mode in which they find it hard to accept that somebody else is making more progress, it is likely to result in excessive lane switching.