In money we trust? The use of financial compensations to repair trust in the aftermath of distributive harm
Trust is vital yet vulnerable in economic exchange relations. In these relations, a widely used strategy in response to distributive harm consists of having the transgressor pay a financial compensation to the victim. This research examines whether financial compensations can increase trust towards a transgressor, and whether the size of the compensation is relevant to this process. We hypothesized and found that whether larger compensations will elicit more trust, depends on how clear the perpetrator's intention to transgress was. Experiment 1 revealed that trust perceptions increased more by a slight overcompensation of the inflicted harm as compared to an exact or a partial compensation, but not if the transgressor's bad intentions became clear through the use of deception in the violation. In Experiments 2 and 3, we replicated these findings and further showed that it is not the use of deception per se, but rather the attribution of bad intent that moderates the effect of compensation size. Experiment 4, using a trust game paradigm revealed that this effect not only occurs for small overcompensations, but also for larger overcompensations.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 114 (2011)
Issue (Month): 2 (March)
|Contact details of provider:|| Web page: http://www.elsevier.com/locate/obhdp|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Colin F. Camerer & Richard H. Thaler, 1995. "Anomalies: Ultimatums, Dictators and Manners," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 209-219, Spring.
- Pillutla, Madan M. & Murnighan, J. Keith, 1996. "Unfairness, Anger, and Spite: Emotional Rejections of Ultimatum Offers," Organizational Behavior and Human Decision Processes, Elsevier, vol. 68(3), pages 208-224, December.
- Rabin, Matthew, 1997.
"Psychology and Economics,"
Department of Economics, Working Paper Series
qt8jd5z5j2, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- McCabe, Kevin A. & Rigdon, Mary L. & Smith, Vernon L., 2003. "Positive reciprocity and intentions in trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 267-275, October.
- Armin Falk & Ernst Fehr & Urs Fischbacher, .
"Testing Theories of Fairness - Intentions Matter,"
IEW - Working Papers
063, Institute for Empirical Research in Economics - University of Zurich.
- Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
- Blount, Sally, 1995. "When Social Outcomes Aren't Fair: The Effect of Causal Attributions on Preferences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 63(2), pages 131-144, August.
- De Cremer, David & Van Kleef, Gerben A., 2009. "When being overpaid makes me feel good about myself: It depends on how the other feels," Journal of Economic Psychology, Elsevier, vol. 30(5), pages 793-802, October.
- Joel L. Schrag, 1999. "First Impressions Matter: A Model Of Confirmatory Bias," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 37-82, February.
- Cremer, David De & Knippenberg, Daan van, 2004. "Leader self-sacrifice and leadership effectiveness: The moderating role of leader self-confidence," Organizational Behavior and Human Decision Processes, Elsevier, vol. 95(2), pages 140-155, November.
- Webster, Cynthia & Sundaram, D. S., 1998. "Service consumption criticality in failure recovery," Journal of Business Research, Elsevier, vol. 41(2), pages 153-159, February.
- Kim, Peter H. & Dirks, Kurt T. & Cooper, Cecily D. & Ferrin, Donald L., 2006. "When more blame is better than less: The implications of internal vs. external attributions for the repair of trust after a competence- vs. integrity-based trust violation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 99(1), pages 49-65, January.
- Schweitzer, Maurice E. & Hershey, John C. & Bradlow, Eric T., 2006. "Promises and lies: Restoring violated trust," Organizational Behavior and Human Decision Processes, Elsevier, vol. 101(1), pages 1-19, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jobhdp:v:114:y:2011:i:2:p:75-86. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.