Money isn’t all that matters: The use of financial compensation and apologies to preserve relationships in the aftermath of distributive harm
Previous studies have shown that when a recipient suffers from financial harm, allocators can use repair strategies that address financial or relational interests to promote relationship repair. Research to date, however, has neglected to study the effects of financial and relational strategies on relationship preservation simultaneously. In the present contribution, we examine this question. Based on the equality norm, we hypothesized that a financial compensation that fails to redress the harm suffered by the recipient (i.e., undercompensation) will be less effective in preserving a relationship than a financial compensation that do redress it (i.e., equal compensation and overcompensation). Moreover, we expected that relational strategies (i.e., apologies) would promote relationship preservation in contexts where the financial compensation alone is insufficient to redress the harm to the recipient, thus in cases of undercompensation. The results of a pilot study and a lab experiment using the dictator game confirmed our hypotheses. Consequently, our studies demonstrate that even in purely economic settings, relational strategies (i.e., apologies) can facilitate relationship preservation over and above financial strategies (i.e., financial compensation).
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.:
- Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages S285-300, October.
- Ochs, Jack & Roth, Alvin E, 1989.
"An Experimental Study of Sequential Bargaining,"
American Economic Review,
American Economic Association, vol. 79(3), pages 355-84, June.
- Dawes, Robyn M & Thaler, Richard H, 1988. "Anomalies: Cooperation," Journal of Economic Perspectives, American Economic Association, vol. 2(3), pages 187-97, Summer.
- Samuelson, Charles D. & Allison, Scott T., 1994. "Cognitive Factors Affecting the Use of Social Decision Heuristics in Resource-Sharing Tasks," Organizational Behavior and Human Decision Processes, Elsevier, vol. 58(1), pages 1-27, April.
- 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.
- Colin Camerer & Richard H. Thaler, 2003. "In Honor of Matthew Rabin: Winner of the John Bates Clark Medal," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 159-176, Summer.
- Desmet, Pieter T.M. & Cremer, David De & Dijk, Eric van, 2011. "In money we trust? The use of financial compensations to repair trust in the aftermath of distributive harm," Organizational Behavior and Human Decision Processes, Elsevier, vol. 114(2), pages 75-86, March.
- Akbar Zaheer & N. Venkatraman, 1994. "Determinants of Electronic Integration in the Insurance Industry: An Empirical Test," Management Science, INFORMS, vol. 40(5), pages 549-566, May.
- De Cremer, David, 2010. "To pay or to apologize? On the psychology of dealing with unfair offers in a dictator game," Journal of Economic Psychology, Elsevier, vol. 31(6), pages 843-848, December.
- 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.
- 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.
- 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.
- Lorenz, Edward, 1999. "Trust, Contract and Economic Cooperation," Cambridge Journal of Economics, Oxford University Press, vol. 23(3), pages 301-15, May.
When requesting a correction, please mention this item's handle: RePEc:eee:joepsy:v:35:y:2013:i:c:p:95-107. 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 references are entirely missing, you can add them using this form.