Medium of Exchange Matters: What's Fair for Goods is Unfair for Money

Psychological Science, Vol. 21, No. 2, pp. 159-162, 2010

5 Pages Posted: 31 Oct 2011

See all articles by Sanford E. Devoe

Sanford E. Devoe

University of Toronto - Joseph L. Rotman School of Management

Sheena S. Iyengar

Columbia Business School - Management Division

Date Written: February 2010

Abstract

Organized groups face a fundamental problem of how to distribute resources fairly. We found people view it as less fair to distribute resources equally when the allocated resource invokes the market by being a medium of exchange than when the allocated resource is a good that holds value in use. These differences in fairness can be attributed to being a medium of exchange, and not to other essential properties of money (i.e., being a unit of account or a store of value). These findings suggest that egalitarian outcomes have a greater likelihood of being accepted as fair when the resources being distributed take the form of in-kind goods rather than of cash transfers.

Suggested Citation

Devoe, Sanford E. and Sethi-Iyengar, Sheena S., Medium of Exchange Matters: What's Fair for Goods is Unfair for Money (February 2010). Psychological Science, Vol. 21, No. 2, pp. 159-162, 2010, Available at SSRN: https://ssrn.com/abstract=1951204

Sanford E. Devoe

University of Toronto - Joseph L. Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Sheena S. Sethi-Iyengar (Contact Author)

Columbia Business School - Management Division ( email )

3022 Broadway
New York, NY 10027
United States

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