Transparency and Fairness in Organizational Decisions: An Experimental Investigation Using the Paired Ultimatum Game

Published Online:https://doi.org/10.1287/stsc.2019.0100

References

  • Adams JS (1965) Inequity in social exchange. Adv. Experiment. Soc. Psych. 2:267–299.CrossrefGoogle Scholar
  • Agarwal R, Anand J, Bercovitz J, Croson R (2012) Spillovers across organizational architectures: The role of prior resource allocation and communication in post‐acquisition coordination outcomes. Strategic Management J. 33(6):710–733.CrossrefGoogle Scholar
  • Bahry DL, Wilson RK (2006) Confusion or fairness in the field? Rejections in the ultimatum game under the strategy method. J. Econom. Behav. Organ. 60(1):37–54.CrossrefGoogle Scholar
  • Bamberger P, Belogolovsky E (2010) The impact of pay secrecy on individual task performance. Personnel Psych. 63(4):965–996.CrossrefGoogle Scholar
  • Bamberger P, Belogolovsky E (2017) The dark side of transparency: How and when pay administration practices affect employee helping. J. Appl. Psych. 102(4):658–671.CrossrefGoogle Scholar
  • Belogolovsky E, Bamberger P (2014) Signalling in secret: Pay for performance and the incentive and sorting effects of pay secrecy. Acad. Management J. 57(6):1706–1733.CrossrefGoogle Scholar
  • Brandts J, Charness G (2011) The strategy vs. the direct-response method: A first survey of experimental comparisons. Experiment. Econom. 14(3):375–398.CrossrefGoogle Scholar
  • Burton RM, Obel B (1988) Opportunism, incentives, and the M-form hypothesis: A laboratory study. J. Econom. Behav. Organ. 10(1):99–119.CrossrefGoogle Scholar
  • Camerer C (2003) Behavioral Game Theory: Experiments in Strategic Interaction (Princeton University Press, Princeton, NJ)Google Scholar
  • Card D, Mas A, Moretti E, Saez E (2012) Inequality at work: The effect of peer salaries on job satisfaction. Amer. Econom. Rev. 102(6):2981–3003.CrossrefGoogle Scholar
  • Colella A, Paetzold RL, Zardkoohi A, Wesson MJ (2007) Exposing pay secrecy. Acad. Management Rev. 32(1):55–71.CrossrefGoogle Scholar
  • Cyert RM, March JG (1963) A Behavioral Theory of the Firm (Prentice-Hall, Englewood Cliffs, NJ).Google Scholar
  • Fehr E, Schmidt KM (1999) A theory of fairness, competition, and cooperation. Quart. J. Econom. 114(3):817–868.CrossrefGoogle Scholar
  • Fershtman C, Gneezy U, List JA (2012) Equity aversion: Social norms and the desire to be ahead. Amer. Econom. J. Microeconom. 4(4):131–144.CrossrefGoogle Scholar
  • Festinger L (1954) A theory of social comparison processes. Human Relations 7(2):117–140.CrossrefGoogle Scholar
  • Fliessbach K, Phillipps CB, Trautner P, Schnabel M, Elger CE, Falk A, Weber B (2012) Neural responses to advantageous and disadvantageous inequity. Frontiers Human Neurosci. 6:165.CrossrefGoogle Scholar
  • Gartenberg C, Wulf J (2017) Pay harmony? Social comparison and performance compensation in multibusiness firms. Organ. Sci. 28(1):39–55.LinkGoogle Scholar
  • Gely R, Bierman L (2003) Pay secrecy/confidentiality rules and the National Labor Relations Act. Univ. Pennsylvania J. Labor Employment Law 6(1):121–156.Google Scholar
  • Guetzkow H, Simon HA (1955) The impact of certain communication nets upon organization and performance in task-oriented groups. Management Sci. 1(3-4):233–250.LinkGoogle Scholar
  • Haran U, Ritov I (2014) Know who you’re up against: Counterpart identifiability enhances competitive behavior. J. Experiment. Soc. Psych. 54:115–121.CrossrefGoogle Scholar
  • Ho TH, Su X (2009) Peer-induced fairness in games. Amer. Econom. Rev. 99(5):2022–2049.CrossrefGoogle Scholar
  • John LK, Loewenstein G, Rick SI (2014) Cheating more for less: Upward social comparisons motivate the poorly compensated to cheat. Organ. Behav. Human Decision Processes 123(2):101–109.CrossrefGoogle Scholar
  • Lanaj K, Hollenbeck JR, Ilgen DR, Barnes CM, Harmon SJ (2013) The double-edged sword of decentralized planning in multiteam systems. Acad. Management J. 56(3):735–757.CrossrefGoogle Scholar
  • Larkin I, Pierce L, Gino F (2012) The psychological costs of pay‐for‐performance: Implications for the strategic compensation of employees. Strategic Management J. 33(10):1194–1214.CrossrefGoogle Scholar
  • Lawler EE (1965) Managers’ perceptions of their subordinates’ pay and of their superiors’ pay. Personnel Psych. 18(4):413–422.CrossrefGoogle Scholar
  • Lee S, Puranam P (2017) Incentive redesign and collaboration in organizations: Evidence from a natural experiment. Strategic Management J. 38(12):2333–2352.CrossrefGoogle Scholar
  • Malhotra D, Murnighan JK (2002) The effects of contracts on interpersonal trust. Admin. Sci. Quart. 47(3):534–559.CrossrefGoogle Scholar
  • Martin J (1982) The fairness of earnings differentials: An experimental study of the perceptions of blue-collar workers. J. Human Resources 17(1):110–122.CrossrefGoogle Scholar
  • Mitzkewitz M, Nagel R (1993) Experimental results on ultimatum games with incomplete information. Internat. J. Game Theory 22(2):171–198.CrossrefGoogle Scholar
  • Moore DA, Healy PJ (2008) The trouble with overconfidence. Psych. Rev. 115(2):502–517.CrossrefGoogle Scholar
  • Nickerson JA, Zenger TR (2008) Envy, comparison costs, and the economic theory of the firm. Strategic Management J. 29(13):1429–1449.CrossrefGoogle Scholar
  • Oosterbeek H, Sloof R, Van De Kuilen G (2004) Cultural differences in ultimatum game experiments: Evidence from a meta-analysis. Experiment. Econom. 7(2):171–188.CrossrefGoogle Scholar
  • Pillutla MM, Murnighan JK (1996) Unfairness, anger, and spite: Emotional rejections of ultimatum offers. Organ. Behav. Human Decision Processes 68(3):208–224.CrossrefGoogle Scholar
  • Rajan R, Servaes H, Zingales L (2000) The cost of diversity: The diversification discount and inefficient investment. J. Finance 55(1):35–80.CrossrefGoogle Scholar
  • Raveendran M, Puranam P, Warglien M (2015) Object salience in the division of labor: Experimental evidence. Management Sci. 62(7):2110–2128.LinkGoogle Scholar
  • Reitzig M, Maciejovsky B (2015) Corporate hierarchy and vertical information flow inside the firm—a behavioral view. Strategic Management J. 36(13):1979–1999.CrossrefGoogle Scholar
  • Sanfey AG, Rilling JK, Aronson JA, Nystrom LE, Cohen JD (2003) The neural basis of economic decision-making in the ultimatum game. Science 300(5626):1755–1758.CrossrefGoogle Scholar
  • Solnick SJ, Schweitzer ME (1999) The influence of physical attractiveness and gender on ultimatum game decisions. Organ. Behav. Human Decision Processes 79(3):199–215.CrossrefGoogle Scholar
  • Tremblay M, Chênevert D (2008) Influence of compensation strategies in Canadian technology-intensive firms on organizational and human resources performance. Group Organ. Management 33(3):269–302.CrossrefGoogle Scholar
  • Tricomi E, Rangel A, Camerer CF, O’Doherty JP (2010) Neural evidence for inequality-averse social preferences. Nature 463(7284):1089–1092.CrossrefGoogle Scholar
  • Tversky A, Kahneman D (1979) Prospect theory: An analysis of decision under risk. Econometrica 47(2):263–291.CrossrefGoogle Scholar
  • Van den Bos K, Wilke HA, Lind EA, Vermunt R (1998) Evaluating outcomes by means of the fair process effect: Evidence for different processes in fairness and satisfaction judgments. J. Personality Soc. Psych. 74(6):1493–1503.CrossrefGoogle Scholar
  • Wang CS, Sivanathan N, Narayanan J, Ganegoda DB, Bauer M, Bodenhausen GV, Murnighan K (2011) Retribution and emotional regulation: The effects of time delay in angry economic interactions. Organ. Behav. Human Decision Processes 116(1):46–54.CrossrefGoogle Scholar
  • Zenger TR (1994) Explaining organizational diseconomies of scale in R&D: Agency problems and the allocation of engineering talent, ideas, and effort by firm size. Management Sci. 40(6):708–729.LinkGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.