The impact of need on distributive decisions: Experimental evidence on anchor effects of exogenous thresholds in the laboratory.

Abstract

Giving more to those who need more has an intuitive appeal for determining the just allocation of resources. The need principle is considered one of the three major principles of distributive justice. In contrast to equality or equity, however, evidence on the adherence to the needs principle rests mainly on stated instead of revealed preferences. In this paper we present an experimental design that exogenously assigns objective, heterogeneous need thresholds to individuals in small laboratory societies structured by a three-line network. The data reveal that a large proportion of individuals respond to others' need thresholds, but at a declining rate as thresholds increase. The equal distribution marks a discrete drop in the need satisfaction rate: Need thresholds above the equal distribution are less frequently satisfied. We conclude that others' needs are weighed against self-interest and equality. Our results provide evidence that distributions may be socially justified on grounds of the need principle.