Publication Type
Journal Article
Version
submittedVersion
Publication Date
6-2020
Abstract
Organizations often keep secret their decisions about what employees receive (e.g., salary, budgets, benefits) to manage fairness concerns. We propose that this can be counterproductive because of a mechanism we call the “escalation of deservingness under secrecy”, where the existence of peers can inflate one’s own sense of deservingness, even when the actual allocations to peers are unknown. Building on the ultimatum game, we developed a Paired Ultimatum Game (PUG) in which a player and a peer respondent engage with the same offeror simultaneously but with no direct competition between respondents. Across three experiments- a live interaction study as well as two scenario studies- using the PUG, we analyze the conditions under which transparency may be better than secrecy in preventing the escalation of deservingness perceptions.
Discipline
Organizational Behavior and Theory | Strategic Management Policy
Research Areas
Strategy and Organisation
Publication
Strategy Science
Volume
5
Issue
1
First Page
55
Last Page
70
Identifier
10.1287/stsc.2019.0100
Publisher
INFORMS (Institute for Operations Research and Management Sciences)
Citation
NAI, Jared; KOTHA, Reddi; and PURANAM, Phanish.
Transparency and fairness in organizational decisions: An experimental investigation using the paired ultimatum game. (2020). Strategy Science. 5, (1), 55-70.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6526
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1287/stsc.2019.0100