Fairness preferences and optimization skills: are they substitutes? An experimental investigation

Departures from rational, self-interested behavior in economic experiments are often attributed to (1) preferences for fairness or altruism, or (2) heuristic errors in decision-making. This paper investigates whether the two are correlated. It asks whether subjects who prefer fairness heuristics like 'equality' to maximizing own gain are especially prone to use (sub-optimal) heuristics while solving problems. Subjects' equality preferences are revealed in votes between public good plans and their performance in solving problems needing probabilistic and deductive reasoning are compared. No evidence is found that individuals with equality preferences are worse at probabilistic or deductive reasoning than self-interested individuals. In fact, they perform slightly better. (C) 1998 Elsevier Science B.V.