N-equality: More people, less (concern for) equality?

Do inequality concerns and, therefore, inequality aversion diminish with group size? Concerns over economic inequality in particular play a central role in debates over law and public policy in areas ranging from taxation and regulation to the scope and nature of the modern welfare state. The present studies contribute to inequality research by examining whether the willingness of third-party decision makers to tolerate inequality when faced with a tradeoff between equality and efficiency (in the sense of maximizing the overall value of the allocation) depends in part on the number of recipients of the resources to be distributed. Building on our earlier N-Effect findings that show how social comparison and competitive motivation decrease as the number of competitors increases (Garcia & Tor, 2009; Tor & Garcia, 2010; Garcia, Tor, & Schiff, 2013), we find that as the number of recipients increases social comparison-based concerns about relative outcomes diminish, thereby increasing tolerance for inequality. Study 1 found suggestive evidence for the effect by analyzing faculty salary data from 5,327 faculty members of the entire University of Texas system, finding that the variance of salaries within an academic department positively correlates with department size. Studies 2a and 2b employed a behavioral choice paradigm using between-subjects designs, asking participants to choose between allocations among groups of recipients while varying the number recipients across the two conditions. Consistent with our predictions, these controlled experiments found that participants preferred the equal payoff significantly more in the small-N conditions than in the larger-N ones. Studies 3a and 3b generalized the effect to additional contexts beyond mere monetary benefits, including allocations of educational benefits and of monetary costs, while Study 4 replicated our findings of 1,034 participants which were recruited by a sampling service offered by Qualtrics. The national sample is a representative U.S. sample of adults that responded to one of our survey questions from an earlier experiment in the series, since the claims of the paper concern individuals generally. The sample was representative by gender, age, ethnicity, income, and region. Study 5 offered evidence showing that the effect of N on inequality concerns is moderated by social comparison, shedding further light on the underlying mechanism. Together, these findings bear important implications for both policy making relating to and research on inequality.