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In negotiation, a link between wealth and fairness concerns
July 31, 2017 Featured Article

The wealthy may be especially intolerant of feeling unfairly treated.

When negotiating, we aim to get the best deal that we can for ourselves. In the process, we sometimes lose sight of whether the other party will perceive that he or she got the short end of the stick. That’s an oversight in any negotiation but may be especially risky when making deals with those who are financially well off, new research suggests.

Accept or reject?

In three experiments, researcher Yi Ding (Southwest University in China/Vrije Universiteit Amsterdam) and his colleagues looked at whether the wealthy are less accepting of unfair offers. Past research has found that powerful people—including those who have access to greater resources than others—tend to demand more for themselves, in violation of fairness norms. Would they also be less accepting of offers that they deem unfair?

To find out, the researchers had participants play the well-known “ultimatum game” from the field of economics in which one party, the “proposer,” receives a sum of money and must decide how much of it, if any, to offer to a partner, the “responder.” The responder then must decide whether to accept or reject the proposer’s offer. If the responder accepts the offer, both players receive the money as allocated by the proposer. If the responder rejects the offer, neither player gets to keep any of the money.

In one of Ding and colleagues’ studies, 630 participants were recruited in China for an online experiment. They first played a game of luck in which they could earn a high bonus, a moderate bonus, or no bonus at all. This induction was found to lead the participants to temporarily feel wealthy, of moderate means, or poor, respectively.

Next, the participants played the role of the responder in an ultimatum game. All were told that their proposer had been allocated CN¥10 (equivalent to about $1.60 at the time of the experiment) and had proposed a split of CN¥8 for himself or herself and CN¥2 for the participant—clearly an unfair offer. Participants then decided whether to accept the offer. About half were told they would get nothing if they rejected the offer; the other half were told they would receive the money that the proposer offered even if they formally rejected it. (This was done to rule out the possibility that the “poor” would feel they couldn’t afford to sacrifice even an unfair offer.)

The results? In both conditions, those induced to feel wealthy rejected the unfair offer about 73% of the time, as compared to a 55% rejection rate for those in the moderate and poor conditions. When participants’ wealth was measured by family income, the wealthier group again was less accepting of unfair offers than those with lower family incomes.

A sense of entitlement

The experimenters also tested, and ruled out, the possibility that those endowed with wealth rejected unfair offers because they felt an altruistic sense of responsibility to enforce fairness norms.

Rather, a different motivation emerged for “wealthy” participants’ rejection of unfair offers: their sense of entitlement, as measured by participants’ level of agreement with statements such as “I deserve fairer treatment than others.” As compared to those induced to feel poor or of moderate means, those who felt wealthy were less accepting of unfair offers because they felt entitled to receive more. 

The results imply that negotiators who are (or who feel) financially well off may be especially prone to rebelling against offers that give them less than others. Given the fact that the study was conducted in China, the researchers also suggest that their results show that “people in a rapidly changing society find it exceptionally easy to justify their relative wealth,” including wealth that “occurs by mere chance.”

Overall, the study adds to research on power in negotiation, which consistently shows that those who feel or actually are powerful tend to believe they are more entitled to resources than those who are less powerful and tend to demand a bigger piece of the pie for themselves.

Resource: “The Rich Are Easily Offended by Unfairness: Wealth Triggers Spiteful Rejection of Unfair Offers,” by Yi Ding, Junhui Wu, Tingting Ji, Xu Chen, and Paul A.M. Van Lange, Journal of Experimental Social Psychology, 2017.

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