Agency and the construction of social preference: between inequality aversion and prosocial behavior

The term social preference refers to decision makers' satisfaction with their own outcomes and those attained by comparable others. The present research was inspired by what appears to be a discrepancy in the literature on social preferences--specifically, between a class of studies demonstrating people's concern with inequality and others documenting their motivation to increase social welfare. The authors propose a theoretical framework to account for this puzzling difference. In particular, they argue that a characteristic of the decision setting--an individual's role in creating the outcomes, referred to as agency--critically affects decision makers' weighting of opposing social motives. Namely, in settings in which people can merely judge the outcomes, but cannot affect them ("low agency"), their concern with inequality figures prominently. In contrast, in settings in which people determine the outcomes for themselves and others ("high agency"), their concern with the welfare of others is prominent. Three studies using a new salary-allocation paradigm document a robust effect of agency. In the high-agency condition, participants had to assign salaries, whereas in the low-agency condition, they indicated their satisfaction with equivalent predetermined salaries. It was found that, compared with low-agency participants, high-agency participants were less concerned with disadvantageous salary allocations and were even willing to sacrifice a portion of their pay to better others' outcomes. The effects of agency are discussed in connection to inequality aversion, social comparison, prosocial behavior, and preference construction.