Partition dependence in financial aid distribution to income categories.

Abstract

When allocating resources, people often diversify across categories even when those categories are arbitrary, such that allocations differ when identical sets of options are partitioned differently ("partition dependence"). The first goal of the present work (Experiment 1) was to replicate an experiment by Fox and colleagues in which graduate students exhibited partition dependence when asked how university financial aid should be allocated across arbitrarily partitioned income brackets. Our sample consisted of community members at a liberal arts college where financial aid practices have been recent topics of debate. Because stronger intrinsic preferences can reduce partition dependence, these participants might display little partition dependence with financial aid allocations. Alternatively, a demonstration of strong partition dependence in this population would emphasize the robustness of the effect. The second goal was to extend a "high transparency" modification to the present task context (Experiment 2) in which participants were shown both possible income partitions and randomly assigned themselves to one, to determine whether partition dependence in this paradigm would be reduced by revealing the study design (and the arbitrariness of income categories). Participants demonstrated clear partition dependence in both experiments. Results demonstrate the robustness of partition dependence in this context.