If you're anything like most Americans, you probably hear or speak that word many times a day. "It's not fair!" screams the petulant child. "That's a fair price," claims the smooth salesman. "I'm trying to be fair," sighs your boss. The magical mystery of fairness is that everyone knows what people are saying when they claim that something is (or isn't) fair--and yet agreement on fairness itself often eludes us. The ultimatum game is the economist's attempt to understand how fairness works.
In the standard version of the game, two people are paired, and one of them is randomly selected to receive $10. That person is called the "proposer", while the other volunteer is known as the "responder". That's because once he receives the $10, the proposer has the responsibility of offering some number of his dollars to the responder. The responder, as the name suggests, gets to decide whether to take that offer.
Here's the twist: if the responder rejects the offer, neither of them gets anything.
In an experiment run by robots, where neither party has any sense of fairness to be offended, the natural result should be that the proposer offers a single dollar. After all, $1 is better than nothing, and if computers had noses, they wouldn't cut them off to spite their face. People, on the other hand, do it all the time. If they don't think the offer is enough, they won't take it--they will cost themselves money just to punish the proposer. They don't care what is optimal; they care about what is fair.
If you listen to the discussions that go on during and after these experiments, that's what you hear, over and over. The logic tends to be a bit circular:
"Why did the proposer offer $5 to the responder?"
"Because that's fair."
"What is a fair outcome in the ultimatum game?"
"The proposer offers $5 to the responder."
That's not a very satisfactory defintion: fairness is both the cause for the action, and the effect of it. We need more precision, because as the Ultimatum Game illustrates, unless markets are fair, they do not work very well. To coin a phrase, we are always dependent on the fairness of strangers.
Because the word is so central to how markets work, I've been engaged in a somewhat dizzying struggle to understand it better, or at least clarify how economists apply it to economic behavior. That's the topic of my latest paper. Early in my project I turned to one of my favorite linguists, Anna Wierzbicka of Australia National University, for her insight into the meaning of the word. Luckily for me, when I emailed her she pointed out that she had recently published a whole chapter on this very topic in her book English: Meaning and Culture .
Did you know that fair is one-to-one untranslatable into any other language--that it is distinctly Anglo in origin? And a relatively new word at that? (Late 18th century, actually--the industrial revolution apparently also vastly enhanced our capacity to complain.) But the twisted history of "fair" is even more interesting than that. For the original antonym of fair is not, as most modern Americans would probably expect, unfair. If you want to understand the roots of fairness, look not to ethicists, but to baseball, which still uses the original dichotomy. If a ball is hit outside the bounds of fair play, it's not unfair--it's foul. That's an important clue. As Columbia law professor George Fletcher had noted in his 1996 book Basic Concepts of Legal Thought, the Anglo-American notion of fairness is firmly rooted in the rules of a game.
These observations have deep implications for our understanding of this social concept, particularly as it relates to economics. Let me be clear: I am not claiming that Anglophones are the only fair people on the planet. It's just that fair doesn't have an exact equivalent in any other language. Other languages either directly import the English word, as in the German exclamation, "Das ist nicht fair!", or fail altogether to have a comparable word, as is the case for French.
German speakers might note that they frequently also use the word gerecht in addition to fair; French speakers might say that they have not one but two words for it: juste and équitable. True enough. However, depending upon context, gerecht is also translatable into English as just or equitable. That's a three-to-one translation, not one-to-one, and probably one reason why the Germans directly import the English word. And while équitable is often translated as "fair", it can also be rendered as equitable, and similarly, juste can be translated into English as just. These languages may have the sense of fairness, but we have a word for it that they do not.
All very interesting, but . . . why does this matter? For one thing, it suggests that the concept of fairness is not necessarily ubiquitous to human cultures. More importantly, however, the translation problem actually helps us to pin down the concept of fairness as it relates to justice and equity. Wierzbicka makes a compelling case for the differences in meaning among fair, just, and equitable, which can be illustrated by the rules of another game.
When the NBA suspends players for leaving the bench to join a fight on the court, the question that sports commentators debate is "Are the suspensions fair?", not "Are the suspensions just?", nor "Are the suspensions equitable?" There's no moral first principle that tells us whether players on the bench should be allowed to join fights. Nor is the central issue whether all the players got punished equally. As Steve Pinker might note, the case for claiming that the words are different is simply that it doesn't feel right to substitute the words interchangeably in context after context, even if some contexts are ambiguous. The question then becomes, what are the common features of the contexts in which we feel uneasy using a word other than fair?
Wierzbicka's research indicated that there are two key contextual elements that make fair precisely the right word for the situation. First, the circumstances entail a tradeoff in welfare between individuals: some action benefits one person at the expense of another. The second element is that other people in the community think that there are limits to how much people are allowed to cost others in order to benefit themselves.
Suspending players who join fights makes all basketball players better off by decreasing the number of fights that get out of hand. Nonetheless, suspensions are hotly debated, because the community demands balance--suspensions need to be long enough to deter fights without crippling the careers of the players involved. The desired balance is highly context-specific, and so sports commentators and fans endlessly discuss exactly what circumstances are relevant in determining what constitutes acceptable suspensions. A player coming off the bench to engage a fight on the court calls for much different response than a player already on court, or a player who heads into the stands to deck a fan.
How does this free us from that circular reasoning we saw in the ultimatum game? Instead of looking inwards for some inherent sense of the word, we look outward, towards the community standards that externally ground the interaction. When two subjects are randomly assigned to the roles of proposer and responder, it is not some pure platonic ideal of fairness that causes a proposer to offer $5. Rather, the proposer knows that other people would think offering less than $5 is below the socially acceptable limit in this situation, and so the proposer obeys those tacit rules.
This explains another widely observed phenomenon: proposers who have earned the right be the proposer, say by doing well on a quiz, offer much less to responders than those who are randomly chosen. What is truly amazing is how accurately proposers ascertain the limits of what they can offer. The rate at which their responders reject their offers doesn't change when proposers who have earned their position offer them a smaller portion of the pie[1]. We (most of us) implicitly agree that earning an advantaged position calls for the application of different rules than does randomly endowing someone with a windfall. Moreover, we all have a pretty good sense of what those rules are; most offers are accepted.
No matter how much we may feel that fairness is a pure principle, it's really a regular social rule, a custom. (Another surprispingly revealing word: you have probably seen the words "customary rates" applied to gratuities and sales commissions). Fairness really boils down to an issue of agreement: can we agree on what rules this particular context calls for? In a future post, I'll expand on what this means for markets and public policy. Until then, let me leave you with another observation of how a small change in the circumstances changes behavior.
A while back, experimenters tried to focus the proposers on the responder's alternatives by asking them to consider what the responder might be expecting. The experimenters expected this to lower the average offer, by reminding proposers of the fact that anything they gave the responders was better than nothing. What they found, to their surprise, was that proposers significantly increased their offers. Just mulling the "customary rate" seems to lead proposers to focus on the possibility that responders may not agree with a lower offer--and hence to make higher offers. [2]
That's why we're hands-on tinkerers. You never know what you're going to get until you actually run the experiment.
Update: The New Yorker's James Surowiecki asks a good question about how much cross-cultural variation there really is in our sense of fairness. The answer is, a surprising amount.
[1] [Hoffman, Elizabeth, Kevin McCabe, Keith Shachat, and Vernon L. Smith. 1994. "Preferences, Property Rights, and Anonymity in Bargaining Games." Games and Economic Behavior, 7(3): 346-380]
[2] [Hoffman, Elizabeth, Kevin McCabe, and Vernon L. Smith. 2000. "The Impact of Exchange Context on the Activation of Equity in Ultimatum Games." Experimental Economics, 3(1): 5-9]
To take the claim that "fair is one-to-one untranslatable into any other language" as evidence of anything is ridiculous. First of all, who is the authority that can tell us that no other language has such a word? Second, this is the "No word for X" fallacy. Just because a given language doesn't have a word for it doesn't mean that the concept doesn't exist or is not important.
I've read about this study in several places and none of the descriptions reveal what seems to me to be two critical points of the experimental design.
1) Does the responder know the amount of money given to the proposer?
2) does the responder know that if he refuses the offer that no one gets anything?
The implication is that the answer to both questions is yes but it would be nice if this was explicitly stated in the article.
I grew up in a bilingual franco-anglo environment, so I feel very qualified to tell you that yes, "fair" is translatable in other languages. The french word "équitable" means pretty much exactly the same thing as "fair": my rough translation of the dictionary definition of "équité", from which équitable is derived, is "natural, spontaneous sentiment of what is right and just".
It has an equivalent in the spanish "equidad", which Wikipedia tells me means equal, but also holds a connotation of social justice and finding a just equilibrium between two causes. A source suggests the italian "equità" is equivalent, but I don't know enough italian to confirm that.
The source of all three words is latin.
Perhaps, M. Joffre, but children in a French playground don't cry "Ce n'est pas equitable" or "Ce n'est pas juste".
They say, "Ce n'est pas du jeu!"
Yah - and the Eskimos have a brazillion words for "snow".
You're a fool.
Mr hanmeng and Mr joffre apparently missed the point of the essay. Mr Wilson did not say that there was no equivalent for "fair", meaning equitable or just, but,rather, our meaning of fair is closer to the idea of "within bounds or expectations." In baseball, when the batter hits a ball that lands beyond the lines, it is "foul." So, when an idea or situation has a result that is beyond the expectations - of which there may be an entire range of expectations, given the circumstances - then the result is said to be "not fair." Mr Blair's experiment seems to deal with this concept. Since the responder has the authority to decide how much to share and the responder has the power to deny the money to both parties, then it quickly becomes obvious that some sort of accomidation has to be made between the parties that strikes both parties as "within the field of play." All of this is within the context of the nature of the relationship between the parties a priori to receiving the money. A supervisor/worker relationship would skew the decision towards the supervisor in both parties minds.
I thoroughly enjoyed the essay.
What most people mean by fair is that everyone have and be the same.
But if everyone did have the same amount of wealth and status, the definition of fair would change and become more complex. Some would begin to see differences and would soon be saying, "It's not fair that Harvey has the same as Hilda! He doesn't deserve it.
So if everyone is not the same, that is not fair. But if everyone were the same, soon that would not be fair. In other words, fairness is illusory. Nothing is ever fair. Everything is unfair, everywhere and all the time.
It is doubtful that very many of you, or even any of you, will recognize the brilliance of my analysis. That is very unfair of you.
This essay is all well and good and interesting, but it is clear to me that Mr. Wilson has become enamored of his clever discovery, namely that the discrete word "fair" might not exist in other languages.
I think his long-winded introduction on the history of the word "fair" does his piece a disservice and reveals itself to be nothing more than a red herring in an otherwise interesting read.
Reading suggestion for readers intrigued by issues raised by this article (and not inclined to dispense with the possibility that "fair is one-to-one untranslatable into any other language" out-of-hand): Alasdair MacIntyre's reflections on the difficulties posed by translation of moral terms (as well as eg. places and names) in "Tradition and Translation", a chapter of his book Whose Justice? Which Rationality?.
And as a native Finnish speaker this leaves me wondering what the Finnish work reilu means. As I think that it is "one-to-one" translatable to fair (in the meaning referred here).
As a side note, I can tell you that Finnish people value fairness quite high.
Also missing, and presumably important to economists, is how the dollar amount would effect the results. It might be easy to wave off $4 in the name of fairness, but say the proposer received one million dollars and offered the responder $10,000. It might not be seen as fair, but it's also hard to imagine most people refusing ten grand on principle.
As a practicing Zen Buddhist, I read this article with interest. It is crystal-clearly written, but leaves something worth mentioning out, namely, begging.
Neither the Buddha of our age, nor Jesus for that matter, were gainfully employed.
In the case of the Buddhist beggar--and every Zen monk is in principle, and in many cases, in act--the giver gives not to the beggar but to the beggar's empty bowl.
What is more, the beggar is not permitted to see the giver, and thus cannot bestow any blessing on the giver.
The act of giving to a beggar involves a repetition of the mystery of the infinitely fertile emptiness of our Source--and Islam's "Hu" echoes this.
"Fairness"? Child's play. "She got more than I did!"
"Fair" has never been an absolute concept, only ever one of emotion; probably because of the origins in baseball, a pastime apparently designed primarily for explosive emotions (at least ... until the players went on strike for a year and it lost some of the attraction). As something that is "one-to-one untranslatable into any other language", however, especially in emotions, it is a latecomer. The Welsh word "Hwyl" comes to mind as something much older, that has terrible difficulty in translation (English seems recently to have solved the problem by hijacking the word) - it also has a passing nod to the concept of "fairness", in the way you treat yourself as well as others.
Why does only "fair" get the accolade of axiom destruction-testing in an "Ultimate Game", and not other words or concepts? What is fair in that?
Bart Wilson repeatedly refers to markets in his article, and even claims that "as the Ultimatum Game illustrates, unless markets are fair, they do not work very well". But the ultimatum game neither illustrates nor models market transactions, even of the simplest kind. In a market transaction resourses in the possession of trading partners are exchanged, one for the other and the other for the one, in a mutually agreed transaction. The ultimatum game, on the other hand, models something resembling gift giving, but not even that, because of its contrived circumstances: a windfall (unearned resource) at its opening, and a windfall, moreover, which may completely evaporate at the end, should the responder decline the offer! Such a situation has few analogs in the world as we know it, and it certainly is no market transaction.
The rules are:
1. Everyone knows the rules
2. Player 1 must share a portion of the money with player 2.
2. Player 2 has the option of voiding Player 1's receiving the money if player 2 decides the amount shared is not fair.
3. Player 1 and player 2 have no communication other than player 2 knowing how much player 1 got and how much player 1 is sharing. Player 1 knows only whether or not his share resulted in acceptance or rejection.
4. There is no dialogue or negotiation between the players.
In this exercise, there are numerous possible variables, such as: do player 1 and player 2 know if either has been in the role before? i.e. can player 1 learn what player 2 deems "fair" by successive trials? What would happen if they reversed roles, knowing that their identities were unchanged? What if the actual person playing each role were chosen at random? What difference would that make?
You can see that what is fundamentally a simple game has many ramifications.
Is there a different standard of "fair" if one knows that one will be doing business again with the same person, than if one has only a slight chance of doing the same busines with that person again?
If player 1 and player 2 alternate roles, converging on a standard of "fair," will that standard be different from the standard each would adopt when each plays the game against unknown opponents? I.e. is there a different standard of fairness within an acquaintance group than in dealing with strangers?
The findings of large-scale trials of this game, given the possible variations (do standards of men-men diferr from women-men or women-women, for example) should provide ample opportunity for a barrage of masters' theses or doctoral dissertations. I am interested in the eventual results.
/Gnomon/
The rules are:
1. Everyone knows the rules
2. Player 1 must share a portion of the money with player 2.
2. Player 2 has the option of voiding Player 1's receiving the money if player 2 decides the amount shared is not fair.
3. Player 1 and player 2 have no communication other than player 2 knowing how much player 1 got and how much player 1 is sharing. Player 1 knows only whether or not his share resulted in acceptance or rejection.
4. There is no dialogue or negotiation between the players.
In this exercise, there are numerous possible variables, such as: do player 1 and player 2 know if either has been in the role before? i.e. can player 1 learn what player 2 deems "fair" by successive trials? What would happen if they reversed roles, knowing that their identities were unchanged? What if the actual person playing each role were chosen at random? What difference would that make?
You can see that what is fundamentally a simple game has many ramifications.
Is there a different standard of "fair" if one knows that one will be doing business again with the same person, than if one has only a slight chance of doing the same busines with that person again?
If player 1 and player 2 alternate roles, converging on a standard of "fair," will that standard be different from the standard each would adopt when each plays the game against unknown opponents? I.e. is there a different standard of fairness within an acquaintance group than in dealing with strangers?
The findings of large-scale trials of this game, given the possible variations (do standards of men-men diferr from women-men or women-women, for example) should provide ample opportunity for a barrage of masters' theses or doctoral dissertations. I am interested in the eventual results.
/Gnomon/
Minor etymological point:
"Fair is foul, and foul is fair: / Hover through the fog and filthy air"
Macbeth Act 1, Scene 1.
Predates the 18th century by quite a bit.
I'm interested to hear how much the idea of fairness obtains in the context of Alan Fiske's different "relational models" i.e. Communal Sharing, Authority Ranking, Equality Matching or Market Pricing.
refs
http://www.rmt.ucla.edu/
http://www.sscnet.ucla.edu/anthro/faculty/fiske/relmodov.htm
http://www.sscnet.ucla.edu/anthro/faculty/fiske/RM_PDFs/RM_bibliography.htm
This piece has caused a wonderful buzz in the linguistics community, with language professionals and academics from around the world adding to the argument over the etymology, meaning, and translatability of the Anglo-American term 'Fairness'. In an effort to bring several of the voices together, I created the following web page:
Does Fairness Translate?
Hope it's of use to some of you, and thank you, Mr Wilson, for the insightful post!
The really fun way to do science with the ulimatum game is not mentioned in the article at all. At the American sociological association's 2007 meeting in New York, a paper was presented displaying the results of playing ultimatum in different countries. Turned out there were huge differences in outcomes between nations. Ultimatum can be used as a simple operationalisation of the strength of the "fairness" norm in different cultures. Sort of like how the MacDonald index (the price of a big Mac) can be used as a simple operationalisation of consumer price differences between countries. (There is an unfortunate hint of smugness in the article, alluding that "fairness" is not translatable to other languages. Really? Being a native Norwegian speaker, the word "rettferdig" is a fairly direct translation of fair. Having lived also in the US, let me tell you that Scandinavians are at least as obsessed with "rettferdighet" as anglo-americans with fairness.)
I faced a real-life example of the ultimatum game. Back when, in signing up for the BMG CD club (8 CDs for 1 dollar! or whatever), you could also refer friends to the club, in which case they'd get the 8 CD deal, but you'd also get 5 free CDs as a referral. There was an unstated "pull" to share these CDs, since you wouldn't have them if not for your friend, but at the same time you have the power since they send you the CDs. We agreed on 2 CDs (but in my head I was definitely thinking 1!).
Fun read but isn't this just a bargaining power problem, one that turns on information and communication like any other negotiation? It's less about what's fair than what either side can force. Joey's right on the money -- give the proposer enough cash to raise the stakes of non-cooperation high enough, and fairness goes out the window. Power is the root of the matter.