Handling negative inputs: On the plausible equity formulae

Equity research has been based on defining formulae that do not necessarily imply the hypotheses thought to have been derived from them and that are not consistent with empirical data cited as supporting equity theory. Neither Adams' (1965) ratio definition nor Walster et al.'s (1970, 1972, 1973) formula satisfy the fundamental criterion that, when equity holds, outcome should be an increasing function of input. Six formulae that do satisfy this fundamental criterion (including Adams' ratio definition restricted to positive ratios, Walster et al.'s revision of their formula, three formulae generated by a simple constructive procedure, and an exponential definition) are compared with respect to 11 other criteria and with respect to their predictions of the results of two thought experiments.