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The Price of Equality: Suboptimal Resource Allocations across Social Categories

Published online by Cambridge University Press:  23 January 2015

Stephen M. Garcia ,
Max H. Bazerman ,
Shirli Kopelman ,
Avishalom Tor  and
Dale T. Miller
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Abstract

This paper explores the influence of social categories on the perceived trade-off between a relatively bad but equal distribution of resources between two parties and a profit maximizing yet unequal one. Studies 1 and 2 showed that people prefer to maximize profits when interacting within their social category, but chose not to maximize individual and joint profits when interacting across social categories. Study 3 demonstrated that outside observers, who were not members of the focal social categories, also were less likely to maximize profits when resources were distributed across social category lines. Study 4 showed that the transaction utility of maximizing profits required greater compensation when resources were distributed across, in contrast to within social categories. We discuss the ethical implications of these decision making biases in the context of organizations.

Type
Special Issue Behavioral Ethics: A New Empirical Perspective on Business Ethics Research
Information
Business Ethics Quarterly , Volume 20 , Issue 1 , January 2010 , pp. 75 - 88
Copyright
Copyright © Society for Business Ethics 2010

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References

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