Social Utility and Decision Making in Interpersonal Contexts

Three studies examined preferences for outcomes to self and a codisputant. Studies 1 and 2 estimated social utility functions from judgments of satisfaction with alternative outcomes. Comparing functional forms, we found that a utility function, including terms for own payoff and for positive and negative discrepancies between the parties' payoffs (advantageous and disadvantageous inequality), provides a close fit to the data. The typical utility function is steeply increasing and convex for disadvantageous inequality and weakly declining and convex for advantageous inequality. We manipulated dispute type (personal, business) and disputant relationship (positive, neutral, or negative) and found that both strongly influence preferences for advantageous but not disadvantageous inequality. A third study contrasted implications of the social utility functions with predictions of individual utility theories.