Moral sentiments and social choice

We examine the implications, for social choice, of individuals having an intrinsic sense of fairness. Taking the viewpoint that social justice reflects the moral attitudes of the constituent members, we analyze the effect of the intensity of the individual sense of fairness on the solution of Nash bargaining over random allocation procedures. We use a stylized model of university admission policies to illustrate our approach. We show that even if social policies are ultimately determined by the bargaining power of the different groups, a society whose members have a common notion of fairness tends to implement fairer admission policies when the intensity of the sense of fairness of individual members increases. While working on the research that is summarized in this paper the authors visited several institutions. Edi Karni visited the Berglas School of Economics, Tel Aviv University and GRID, at Ecole Normale Superieur de Cachan. Zvi Safra visited CERMCEM and EUREQua, at the University of Paris I and LIP6, at the University of Paris 6. The hospitality of these institutions is gratefully acknowledged. We are also grateful to the editor and two anonymous referees for their very useful comments and suggestions. Zvi Safra thanks The Israel Science Foudation (grant 1299/05) for its support.