Need-based Justice in Social Exchange Networks

We examine experimentally whether heterogeneous needs affect the distribution of outcomes in small and negatively connected exchange networks. We operationalize an individual need as a threshold of points an actor has to obtain in a negotiation in order to earn additional income in a subsequent real effort task. In contrast to previous exchange network experiments, an offer is not restricted to the negotiating dyad but can allocate the endowment to all network members. Contrary to the standard rational choice assumption, our results show that a majority of accepted offers fulfill the needs of all actors in the network. Moreover, the network structure, the ranking of needs, as well as the interaction of these factors, significantly affect the distribution of resources in the network.