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How many pennies for your pain? Willingness to compensate as a function of expected future interaction and intentionality feedback

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  • Desmet, Pieter T.M.
  • Leunissen, Joost M.

Abstract

Despite increased research efforts in the area of reconciliation and trust repair in economic relations, most studies depart from a victim’s perspective and evaluate the process of trust repair by looking at the impact of restoration tactics on victims’ reactions. We focused on the transgressor’s perspective and present findings from two studies that investigated how the amount of compensation that a transgressor is willing to pay depends on victims’ reactions to the transgression (i.e. whether they claim the transgression happened intentionally or unintentionally) and the time horizon of the relationship between the transgressor and the victim (future vs. no future interaction). We hypothesized and found that transgressors are willing to pay less compensation to a victim who believes the transgression happened intentionally (as opposed to unintentionally), but only so when they share no future interaction perspective together. When transgressors have a future interaction perspective with the victim, intentionality feedback does not affect compensation size.

Suggested Citation

  • Desmet, Pieter T.M. & Leunissen, Joost M., 2014. "How many pennies for your pain? Willingness to compensate as a function of expected future interaction and intentionality feedback," Journal of Economic Psychology, Elsevier, vol. 43(C), pages 105-113.
    • Handle: RePEc:eee:joepsy:v:43:y:2014:i:c:p:105-113
    DOI: 10.1016/j.joep.2014.05.002
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    References listed on IDEAS

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    1. Leunissen, Joost M. & Cremer, David De & Reinders Folmer, Christopher P., 2012. "An instrumental perspective on apologizing in bargaining: The importance of forgiveness to apologize," Journal of Economic Psychology, Elsevier, vol. 33(1), pages 215-222.
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    5. Haesevoets, Tessa & Reinders Folmer, Chris & De Cremer, David & Van Hiel, Alain, 2013. "Money isn’t all that matters: The use of financial compensation and apologies to preserve relationships in the aftermath of distributive harm," Journal of Economic Psychology, Elsevier, vol. 35(C), pages 95-107.
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    Cited by:

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    2. Janne Doorn & Marcel Zeelenberg & Seger M. Breugelmans, 2018. "An exploration of third parties’ preference for compensation over punishment: six experimental demonstrations," Theory and Decision, Springer, vol. 85(3), pages 333-351, October.

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    More about this item

    Keywords

    Compensation; Intentionality; Perpetrators; Transgression; Reconciliation; Trust repair;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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