Maximizing joint gains
Subtitle: transaction utility within and between groups
By: Stephen Garcia, Max H. Bazerman, Dale Miller
Series: Working paper / Division of Research, Harvard Business School -- 06-033; Working paper (Harvard Business School. Division of Research) -- 06-033
Publisher: Division of Research, Harvard Business School
Published: 2006
Place of publication: Boston
Language: eng
Number of pages: 20
Description: In a choice between equal payoffs (e.g., self gets $500 / other person gets $500) and more lucrative but disadvantageously unequal payoffs (e.g., self gets $600 / other person gets $800 ), individuals willingly trade disadvantageous inequality for extra profit (e.g., Blount and Bazerman, 1996), choosing the more lucrative but disadvantageously unequal payoff. The present analysis, however, explores how the transaction utility (Thaler, 1985; 1999), the perceived value of such "deals," depends on whether allocation recipients come from the same social category (e.g., same gender) or different ones (e.g., females versus males). Studies 1 - 3 test the prediction that individuals tend to trade disadvantageous inequality for greater profit when allocations recipients share the same social category (e.g., within groups), but do not when recipients belong to different social categories (e.g., between groups). Study 4 shows that the transaction utility of disadvantageous inequality requires a greater premium between groups than it does within them. Implications for maximizing joint gains are discussed.
Notes: Includes bibliographical references.