The Price of Equality: Suboptimal Resource Allocations across Social Categories

Authors

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

Document Type

Article

Publication Date

2010

Publication Information

20 Bus. Ethics Q. 75 (2010)

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.

Comments

Avishalom Tor joined the faculty at Notre Dame Law School in 2011.

Recommended Citation

Stephen M. Garcia, Max H. Bazerman, Shirli Kopelman, Avishalom Tor & Dale T. Miller, The Price of Equality: Suboptimal Resource Allocations across Social Categories, 20 Bus. Ethics Q. 75 (2010).
Available at: https://scholarship.law.nd.edu/law_faculty_scholarship/1512