The price of equality: Suboptimal resource allocations across social categories

Stephen M. Garcia, Max H. Bazerman, Shirli Kopelman, Avishalom Tor, Dale T. Miller

Research output: Contribution to journalArticlepeer-review


This paper explores the influence of social categories on the perceived trade-off between a relatively bad but equal distribution of resources between two parties and a profit maximizing yet unequal one. Studies 1 and 2 showed that people prefer to maximize profits when interacting within their social category, but chose not to maximize individual and joint profits when interacting across social categories. Study 3 demonstrated that outside observers, who were not members of the focal social categories, also were less likely to maximize profits when resources were distributed across social category lines. Study 4 showed that the transaction utility of maximizing profits required greater compensation when resources were distributed across, in contrast to within social categories. We discuss the ethical implications of these decision making biases in the context of organizations.

Original languageEnglish
Pages (from-to)75-88
Number of pages14
JournalBusiness Ethics Quarterly
Issue number1
StatePublished - Jan 2010

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Philosophy
  • Economics and Econometrics


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