Money changes what we think is fair, research finds

Dec 09, 2009

Thinking of rewarding your sales department for a job well done? You might not want to make cash part of the pay-off.

A study to be published in an upcoming issue of Psychological Science, a journal of the Association for , shows that when it comes to distributing resources, people's ideas about what's fair change depending on what's being handed out. If it's something that has its own intrinsic value - in-kind goods such as food or vacation days - people are more likely to see equal distribution of such items as fair.

But if it's something that is only valuable when it's exchanged - such as money or even credit card reward points - ideas of fairness shift to a more market-based attitude. In that case, the thinking is that people should receive according to what they've contributed.

"What exactly is it about money that causes people to treat it so differently than other resources?" asks Sanford DeVoe, an assistant professor of , at the University of Toronto's Rotman School of Management who co-wrote the paper with Columbia University's Sheena Iyengar.

"The paper shows that it is the property of money being a medium of exchange," Prof. De Voe says. "When you allocate something that only has its value in what it can be exchanged for, that is what activates a market mindset and really invokes these strong norms about input and effort leading to ."

The findings have applications for how companies cope with negative situations too. A firm that wants to cut costs might consider giving employees all the same time off rather than making equal pay cuts across the board that could potentially lead to disgruntlements from a sense of unfairness.

Source: University of Toronto (news : web)

Explore further: Facial masculinity not always a telling factor in mate selection

add to favorites email to friend print save as pdf

Related Stories

Are humans hardwired for fairness?

Apr 16, 2008

Is fairness simply a ruse, something we adopt only when we secretly see an advantage in it for ourselves" Many psychologists have in recent years moved away from this purely utilitarian view, dismissing it as too simplistic. ...

Money makes the heart grow less fond... but more hardworking

Jul 09, 2008

Money is a necessity: it provides us with material objects that are important for survival and for entertainment, and it is often used as a reward. But recent studies have shown that money is not only a device for gaining ...

Recommended for you

Video blinds us to the evidence, study finds

15 hours ago

Where people look when watching video evidence varies wildly and has profound consequences for bias in legal punishment decisions, a team of researchers at New York University and Yale Law School has found. ...

User comments : 1

Adjust slider to filter visible comments by rank

Display comments: newest first

Corban
not rated yet Dec 09, 2009
Dollar's value, measured in a common unit (the dollar), is much more salient than that of a teddy bear or a snowglobe. People are more conservative with uncertainty. This is not the case for money, where they'll go fullbore.