Costly fairness in children is influenced by who is watching.

Advantageous inequity aversion emerges relatively late in child development, yet the mechanisms explaining its late emergence are poorly understood. Here, we ask whether children begin to reject advantageous inequity, a costly form of fairness, once reputational concerns are in place. Specifically, we examine the role of peer monitoring in promoting fair behavior. In Study 1 ( = 212 pairs; Ages 6 to 9), we test whether children are less likely to reject advantageous allocations depending on who is aware of their behavior. Results show that children are more likely to accept advantageous allocations when their peer partner is unaware of their advantage. In Study 2 ( = 134 pairs; Ages 8 and 9), we show that this effect is driven specifically by whether the affected peer partners can see the allocation and not by whether third-party peer observers witness the decision. Together, these results shed light on the factors influencing fairness development in childhood and, more specifically, suggest that advantageous inequity aversion is influenced by a desire to appear fair to those getting the short end of the stick. (PsycINFO Database Record (c) 2020 APA, all rights reserved).