Abstract

http://ssrn.com/abstract=661444
 
 

References (43)



 
 

Citations (8)



 


 



Profit Maximization versus Disadvantageous Inequality: The Impact of Self-Categorization


Stephen M. Garcia


University of Michigan

Avishalom Tor


Notre Dame Law School

Max H. Bazerman


Harvard Business School - Negotiations, Organizations and Markets Unit

Dale T. Miller


Stanford Graduate School of Business

December 2004

Harvard PON Working Paper

Abstract:     
Research on the separate versus joint evaluation of payoff allocations (e.g., Bazerman, Loewenstein, & White, 1992) has found that individuals prefer an equitable allocation between themselves and another person (e.g., self-$500/other-$500) to an alternative allocation where they receive a higher absolute but disadvantageously unequal outcome (e.g., self-$600/other-$800) when these alternatives are evaluated separately. On the other hand, when evaluating these alternatives jointly, individuals show the opposite pattern, preferring profit maximization. This paper argues, however, that the more rational preference for profit maximization in joint evaluation is limited to those circumstances where the payoff recipients share a social identity. When social identity differs between recipients, individuals no longer prefer profit maximization under joint evaluation. Four experiments support the hypothesis that overlaying social categories onto payoff recipients shifts preferences from profit maximization to equitable allocation, even under joint evaluation. Implications for organizations, which are inevitably rife with different social identities, are discussed.

Number of Pages in PDF File: 29

Keywords: Preference Reversals, Decision Making, Social Categories

working papers series


Download This Paper

Date posted: February 16, 2005  

Suggested Citation

Garcia, Stephen M. and Tor, Avishalom and Bazerman, Max H. and Miller, Dale T., Profit Maximization versus Disadvantageous Inequality: The Impact of Self-Categorization (December 2004). Harvard PON Working Paper. Available at SSRN: http://ssrn.com/abstract=661444 or http://dx.doi.org/10.2139/ssrn.661444

Contact Information

Stephen M. Garcia
University of Michigan ( email )
741 Dennison Hall
Ann Arbor, MI 48109
United States
734-615-2561 (Phone)
HOME PAGE: http://www.sitemaker.umich.edu/stephen.garcia
Avishalom Tor
Notre Dame Law School ( email )
P.O. Box 780
Notre Dame, IN 46556-0780
United States
Max H. Bazerman (Contact Author)
Harvard Business School - Negotiations, Organizations and Markets Unit ( email )
Soldiers Field
Boston, MA 02163
United States
617-495-6429 (Phone)
617-496-4191 (Fax)
HOME PAGE: http://www.people.hbs.edu/mbazerman
Dale T. Miller
Stanford Graduate School of Business ( email )
518 Memorial Way
Stanford, CA 94305-5015
United States

Feedback to SSRN


Paper statistics
Abstract Views: 3,039
Downloads: 253
Download Rank: 68,574
References:  43
Citations:  8

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.296 seconds