Inconvenient truths: A note on information avoidance and the price of fairness

Previous literature has shown that people are often reluctant to learn whether individually profitable actions have negative consequences for others. In an experimental allocation decision, we vary the ‘inconvenience’ of becoming informed about the payoffs of another player by changing the costs and benefits of choosing the fair outcome. Making the fair allocation cheaper to implement turns out to have a multiplier effect, raising both altruistic choices of informed subjects and the fraction of subjects that chooses to become informed. Thus, in situations of uncertainty, subsidizing altruistic choices to decision makers could be an effective tool for raising social welfare. By contrast, variations in the size of recipients’ potential payoffs have a smaller effect on ignorance and fair choices.