Fairness and self-interest: An assessment

This paper provides an assessment of some fairness notions that are particularly relevant to economics of the marketplace. Motivations of fairness are also discussed. In this vein, three sources of fairness are outlined: moral precepts, stable convention, and reciprocity. Some suitable theoretical and empirical evidence are presented in support of these views. Economic models based on the view that man is purely selfish have performed poorly in some areas, particularly game theory and voluntary contributions to public goods. In other social sciences, notably in psychology, political science, and sociobiology researchers have also encountered systematic deviations from purely selfish behavior. There is ample evidence that both fairness and self-interest matter. It is hoped that this paper will provide a better comprehension of the tensions and complementarities between fairness and self-interest and improve our understanding of human behavior.