Money isn’t all that matters: The use of financial compensation and apologies to preserve relationships in the aftermath of distributive harm

Tessa Haesevoets, Chris Reinders Folmer, David De Cremer and Alain Van Hiel

Journal of Economic Psychology, 2013, vol. 35, issue C, 95-107

Abstract: Previous studies have shown that when a recipient suffers from financial harm, allocators can use repair strategies that address financial or relational interests to promote relationship repair. Research to date, however, has neglected to study the effects of financial and relational strategies on relationship preservation simultaneously. In the present contribution, we examine this question. Based on the equality norm, we hypothesized that a financial compensation that fails to redress the harm suffered by the recipient (i.e., undercompensation) will be less effective in preserving a relationship than a financial compensation that do redress it (i.e., equal compensation and overcompensation). Moreover, we expected that relational strategies (i.e., apologies) would promote relationship preservation in contexts where the financial compensation alone is insufficient to redress the harm to the recipient, thus in cases of undercompensation. The results of a pilot study and a lab experiment using the dictator game confirmed our hypotheses. Consequently, our studies demonstrate that even in purely economic settings, relational strategies (i.e., apologies) can facilitate relationship preservation over and above financial strategies (i.e., financial compensation).

Keywords: Financial compensation; Apology; Equality norm; Relationship preservation; Dictator game (search for similar items in EconPapers)
JEL-codes: D23 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:35:y:2013:i:c:p:95-107

DOI: 10.1016/j.joep.2013.02.003

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