Final answer:
The concept where people assess fairness by comparing their situation to others is termed social comparison, intertwined with theories of distributive justice and the just-world hypothesis.
Step-by-step explanation:
The concept that suggests people evaluate the fairness of their situations by comparing them with others is called social comparison. This concept touches on various theories in social psychology, including the ideas of distributive justice and the just-world hypothesis. For instance, Charles Herbert Cooley's looking-glass self illustrates how we see ourselves in relation to others' reactions, which informs our perception of fairness and our social standing.
Furthermore, when it comes to distributive justice, there are different views on what constitutes fairness. Some argue that a just society is one that ensures the well-being of the least fortunate, highlighting the need for relative evaluation of one's situation. Meanwhile, Amartya Sen's capability approach emphasizes individual needs and the provision of resources to live a fulfilling life, which includes the concept of basic income.
In contrast, Rawls suggests that justice requires enhancing the position of the least well-off in society. Equality of opportunity and luck egalitarianism, as proposed by theorists like Dworkin, suggest that even if outcomes are unequal, the process must be fair and based on personal choices, striking a balance between fairness and freedom.