What’s fair?

Suppose you and I got in a car accident and both suffered from total amnesia. We’re in a hospital somewhere, neither of us have identification, but luckily all of the deeds of our possessions were in the trunk of the car and now lay before us on a hospital bed. Oh, also, there are results of the IQ test we apparently took together before the accident. One of us is a bit smarter than the other, but we don’t know which.

We can’t tell by the short conversations we’ve had who is the smarter nor who would have owned what.

Now we’ve been discharged from the hospital, but before we go on our separate ways we have to decide how to divvy up the possessions. Clearly, one of us is smarter and has the means to earn a higher income. What would be a fair division the deeds?

Now here’s a rather unrealistic catch: suppose we were deciding, today before we leave the hospital, how to divvy up our possessions, whatever they may be, a year from now? What would be the most fair way to do so?

12 thoughts on “What’s fair?”

  1. Quiet you. You’re contaminating my experiment.

    Seriously though. You can read Rawls as having a particular hypothesis about people’s preferences behind the veil. That hypothesis is testable, both by surveys like this post and via lab experiments like this one (pdf).

    I don’t think Rawls’ view of people preferences should have priority over people’s actual preferences. The veil’s a good test of people’s sense of justice… Rawls’ sense might be wrong, but that doesn’t make the veil any less illuminating.

  2. Well, I prefer not to care about fairness.
    I also prefer not to care about preferences.

    I prefer moral nihilism.
    I prefer for you to prefer it too.

  3. Really? In the situation I’ve laid out to you, you’re indifferent between me taking everything and you taking everything?

    Here’s were I start to sing the virtues of revealed preferences and behavioral data over survey results!

  4. “What would be the most fair way to do so?”

    Thunderdome, of course. Two men enter. One man leaves.

  5. You misunderstand me, preferences are not morality, but I don’t want to derail your discussion here. I like this page: http://www.science.uva.nl/~seop/entries/skepticism-moral/

    To the point… taking the idea of rights seriously implies more than an obsession with the division of loot.

    And then there’s the problem of secession. Are we restricting our investigation to the set accessible to the grand coalition (in the cooperative game theory sense)?

  6. Well, I’m talking about preferences, not morality.

    It looks like I’ll have to be the first to volunteer answers to the questions.

    I’d split the loot between us equally in the first instance.

    The question of how to split the loot a year from now is harder. On the one hand, any inequality then is due to individual talent and even though one of us being smarter is not the other’s fault, I don’t have a sense that those inequalities are bad. So no redistribution required.

    On the other hand, if I turn out to be the smarter of the two of us, I’d be worried that I’d produce so much more than you that there would be a non-negative probability that you would grow envious and try to steal from me (by force maybe). I might want to set some threshold of inequality where some redistribution kicks in, if only to prevent you from being inspired to beat me up and take my stuff. This would also help reduce the chance of me becoming envious if I turned out to be the stupid one.

  7. Oh, and let me just say, how American of you to think that the smarter person ends up with more money!

    In the Real World the person best connected gets richer, instead. So what are we talking about here? :-)

    As a practical matter, a 50/50 split makes sense, unless, of course, one of the two has a lower discount rate and therefore can wait out for more bargaining. (I vaguely remember a result in game theory where alternative proposal-making leads to an advantage to the more patient player.) — The question is, would the influence of patience in bargaining be “fair”? Whatever that means…

  8. IQ as a proxy for human capital. And you will learn soon enough that it is a cardinal sin to doubt human capital as a determinant of wages. :-) (Maybe I should have said we found diplomas in the trunk, dated from last June, one from high school and the other from college)

    Two things: in the hospital we don’t know who has which discount rate. Also, in the second scenario, we have to decide today, in the hospital, the distribution a year from now.

  9. Yeah, diplomas are probably a better predictor of material success than IQ. Say there’s one Engineering diploma and one Drama diploma.

  10. Just swong today. Only strange people on the bus call me “response.”

    Going to use my 1337 5k1llz to hack causality and retroactively inject my response in the comment stream. #5 feels like a good number. Aaaaaand done. Unfortunately, the butterfly effect has caused a sentence about the letter “J” to appear right here for no reason. That seems to be the extent of the damage.

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