Distributive Justice and the Allocation of Costs,Losses, and Profits

In an experimental study, participants read a scenario about five business partners who sold plants at a flea market. Each partner obtained a different outcome and still had to pay the costs of the partnership. Participants either had to indicate what they considered to be a fair distribution of the costs (given each individual partner's earnings) or what they considered to be a fair distribution of the net results (the total outcome minus the costs). The total outcome was either higher or lower than the costs (i.e., the enterprise resulted in a net profit or a net loss). The results indicate that fairness judgments are affected by the target of distribution. Negative outcomes are distributed differently than positive outcomes, and within the domain of negative outcomes, marked differences are observed between costs and net losses. The results are explained in terms of the differential salience of the distribution of the net result.