Medium of exchange matters: what's fair for goods is unfair for money.
Organized groups face a fundamental problem of how to distribute resources fairly. We found people view it as less fair to distribute resources equally when the allocated resource invokes the market by being a medium of exchange than when the allocated resource is a good that holds value in use. These differences in fairness can be attributed to being a medium of exchange, and not to other essential properties of money (i.e., being a unit of account or a store of value). These findings suggest that egalitarian outcomes have a greater likelihood of being accepted as fair when the resources being distributed take the form of in-kind goods rather than of cash transfers.
DeVoe
Sanford E
SE
University of Toronto, Rotman School of Management, 105 St George St., Toronto, Ontario, Canada. sanford.devoe@rotman.utoronto.ca
Iyengar
Sheena S
SS
D001290:Attitude; D003431:Cross-Cultural Comparison; D004467:Economics; D004526:Efficiency; D004649:Employee Incentive Plans; D006801:Humans; D007182:Income; D007600:Judgment; D009042:Motivation; D040841:Resource Allocation; D012201:Reward; D012935:Social Justice; D012945:Social Values