Want to Make Better Decisions? Start Experimenting
Citation:
Luca, Michael, and Max Bazerman. "Want to Make Better Decisions? Start Experimenting." MIT Sloan Management Review 61, no. 4 (Summer 2020). View Details|
Article Business Ethics Quarterly The Price of Equality: Suboptimal Resource Allocations across Social Categories |
Abstract
This paper explores the influence of social categories on the perceived trade-off between relatively bad but equal distribution of resources between two parties and profit maximizing, yet asymmetric, payoffs. Studies 1 and 2 show that people prefer to maximize profits when interacting within their social category, but chose suboptimal individual and joint profits when interacting across social categories. Study 3 demonstrates 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 shows 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.
Keywords: Equality and Inequality; Resource Allocation; Societal Protocols; Profit; Decision Making; Prejudice and Bias; Market Transactions; Ethics; Power and Influence; Distribution; Organizations;
Citation:
Garcia, Stephen M., Max Bazerman, Shirli Kopelman, Avishalom Tor, and Dale T. Miller. "The Price of Equality: Suboptimal Resource Allocations across Social Categories." Special Issue on Behavioral Ethics: A New Empirical Perspective on Business Ethics Research. Business Ethics Quarterly 20, no. 1 (January 2010): 75–88.
