Judgements of compensation for misfortune: The role of expectation

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Abstract
In three questionnaire studies, we asked subjects how much compensation should be provided, by a third party, to an accident victim. We tested the hypothesis, derived from norm theory, that compensation would be greater when the injury was less to be expected, e.g. when the injury was caused by failure ‐ as opposed to success ‐ of a safety routine. To rule out the possibility that such expectation effects depended on subjects' anticipations of the reactions of the parties involved in the accident. the parties were said to be ignorant of factors that could affect these reactions. Effects of expectation were still found, even when subjects themselves judged the accident to be equally serious in all conditions. Information about what would have happened in the absence of the cause (e.g. if the routine had succeeded instead of failed) affected compensation. as predicted by norm theory, but expectation effects were found even when this information about counterfactuals was held constant, so norm theory cannot account for all the results. We suggest that subjects are applying simple heuristics unreflectively Subjects may also have attempted to fulfil an implicit social contract through their awards. The results cannot be explained through the hypothesis that compensation was optimal: the accident was the same, and it had no deterrent effect, so optimal compensation should be the same in all cases.

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