British Academy 2006 Keynes Lecture

Date: Tuesday 7 March, 2006 at 5.30pm

Please note change of venue: Tyndall Lecture Theatre, H.H. Wills Physics Laboratory (Department of Physics), Tyndall Avenue

How and Why Does Fairness Matter?

Professor Ken Binmore

Why did evolution endow us with a sense of what is fair? How can a better understanding of how fairness works improve our lives? Game theory offers answers to these questions that allow a new interpretation of John Rawls' theory of justice.

Economists are commonly thought to believe that the operation of the free market should trump any considerations of social justice. This view is sustainable only if one subscribes to the naive view that real markets and other social systems only have one equilibrium. However, game theory shows that realistic social systems usually have many equilibria. It is therefore not enough to argue that people will strive to improve their individual welfare. Their behaviour needs to be coordinated so that they all end up playing the same equilibrium. I argue that fairness can be explained as one of nature's answers to such coordination problems. That is to say, fairness evolved as an equilibrium selection device. This hypothesis leads to a theory of the structure of the fairness norms that we use in solving the coordination problems of everyday life. The theory allows a new interpretation of John Rawls' famous Theory of Justice that reconciles the seemingly hostile approaches of egalitarians and utilitarians.

There will be a drinks reception following the lecture

Please note change of venue: Tyndall Lecture Theatre, H.H. Wills Physics Laboratory (Department of Physics), Tyndall Avenue

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