To pay or to apologize? On the psychology of dealing with unfair offers in a dictator game

Abstract: Prior research has largely failed to focus on how transgressors can promote trust when having made unfair offers in bargaining. I investigated in the context of receiving an unfair offer in a dictator game when financial compensations and when apologies are most effective in motivating trust behavior by the violated party. I hypothesized that when losses were allocated, the violated party would be motivated to show more trust behavior towards the transgressor when a financial compensation (resulting again in equal final outcomes) relative to an apology was delivered, whereas when gains were allocated, apologies would be more effective in promoting trust behavior than a financial compensation. Results from a laboratory study indeed supported this prediction as such demonstrating the importance of how allocation decisions are framed (i.e., loss or gain) in testing the effectiveness of trust repair strategies (financial compensations vs. apologies). [Copyright &y& Elsevier