The Malleability of Inequality Trade-Offs

Debates about economic inequality permeate public discourse around the globe, and researchers devote much attention to studying its causes, consequences, and more. While the psychological study of inequality is still in its relatively early stages, this chapter considers the role of inequality in distributive decisions from a social comparison perspective. This perspective is particularly apposite, since the subject matter of social comparisons—that is, people’s relative outcomes or positions—is what defines inequality. The social comparison approach to inequality suggests that factors that influence decision-makers’ social comparison concerns are also likely to affect their decisions when inequality is at stake. After making the theoretical case for the role of the situational factors of social comparison in decisions that implicate inequality, we illustrate it through extant findings on social categorisation as well as exploratory evidence of the effect of another situational factor—the number of recipients of an unequal distribution. With respect to both factors, we identify the impact of social comparison by studying the weight decision-makers give to equality in resource allocations that require trade-offs between equality and competing distributive considerations (e.g., efficiency). Importantly, the findings we discuss indicate that decision-makers’ equality preferences are malleable and depend in part on situational factors that can bear little normative relevance for those important trade-offs between inequality and other distributive considerations.