One of the most fascinating reads is the classic tale of Edmond Dantes found in Alexandre Dumas’ The Count of Monte Cristo. As a young sailor, Dantes has a promising future ahead. He appears to be in line for promotion to captain, he is engaged to a beautiful and loving woman, and he appears to be very near achieving the goals that will make him happy. But just as he is about to realize his dreams, three jealous competitors conspire to have him falsely arrested and imprisoned for high treason. After spending years in prison, Dantes gives up hope and decides to starve himself to death. At this point, an older prisoner, Abbe Faria, accidently tunnels into Dantes’ cell in a failed attempt to escape. They become fast friends, and Faria uses their time not only to instruct Dantes in high culture, science, and languages but also to share with him the location of an enormous fortune that awaits Dantes should he ever successfully escape.
After Faria dies, Dantes succeeds in escaping, and he finds the seemingly inexhaustible fortune Faria had told him of. At this point, a perfectly selfish person would take the money and live the most opulent life imaginable. Someone motivated by altruism might take his fortune and use some for his own enjoyment and also use a substantial amount to enrich the lives of his lost love or other unfortunate friends from his prior life. In fact, Dantes does give an anonymous gift of cash to the Morrel family, who had stood by him throughout his troubles. However, he uses the remainder of his fortune to exact the slowest and most painful revenge he can on each of the conspirators who had put him in prison—one of whom is now married to his former fiancée. At each turn of the knife, the reader feels somehow victorious and happy that the conspirators receive their just reward for vile villainy against the innocent, though Dantes seems to become less and less the hero.
The notion of altruism provides a very simplistic view of how people deal with one another. In truth, we do not always have others’ best interest at heart. In some cases, we even seek to harm others at our own expense. Among the most extreme examples of this are suicide bombers who give their lives in the hope that they can injure or kill others. These actions are clearly incongruous with either the selfish decision maker or the altruistic decision maker. Moreover, it seems unlikely that we could find people who behave in such a cruel or vindictive manner generally to everyone they meet. In this chapter we introduce a more-nuanced set of theories about other-regarding preferences. The majority of these theories have developed out of the notion that people seek a fair distribution of consequences. This may be one of the reasons we see nearly even splits in many of the versions of the dictator game discussed in Chapter 14. The notion of fairness has had many different definitions in the literature, and we will cover the most important of these.
One branch of the research on fairness concerns how people react not only to the distribution of outcomes but also to the motivations and perceptions of others. Such conceptions of psychological motivations in games can provide powerful explanations of the behavior commonly observed in laboratory games. These models of behavior also have implications for the real world. Much of work and business is conducted in teams or other groups in which the actions of each individual involved will affect the payouts of all. How teams perceive the diligence of each of their individual members can have a substantial impact on how any one individual will decide on how much effort to put forth. Similarly, firms can use the way they are perceived in the community (e.g., socially conscious vs. greedy) to market their products and services. In each case, how actions are perceived can have a big impact on the behavior of others and ultimately on the profits of firms and well-being of consumers and workers.