BazermanMoore

122 Chapter 7: Fairness and Ethics in Decision Making
doing so is not in their rational self-interest. For example, when responders in the oneshot
anonymous ultimatum game reject offers, they are choosing to forego a monetary
gain in order to punish the proposer for making an unfair allocation.
Indeed, Ernst Fehr’s research shows that observers who are not personally affected
by unfair treatment are actually willing to pay money in order to punish others
whom they observe behaving unfairly (Fehr & Fischbacher, 2003; Fehr & Gächter,
2000). Fehr and Fischbacher (2004) had participants in their experiment play a dictator
game with a twist. In addition to the dictator and the recipient, there was also a thirdparty
observer. The observer could see what the dictator provided the recipient and
could decide whether to punish the dictator for the allocation. Such punishment was
costly: For every $1 the observer paid to punish, the dictator’s own payment was reduced
by $3. Note that no purely self-interested observer would ever engage in such
altruistic punishment, which is costly to both the dictator and the punisher, and provides
no economic benefit. Nevertheless, 55 percent of observers chose to punish dictators
who gave less than half of their money to their recipients. The less dictators gave,
the more they were punished by the observers.
Fehr and his colleagues argue that their evidence shows that people actually derive
measurable satisfaction from such ‘‘altruistic punishment’’ that allows them to teach a
lesson to a cheater. They have shown that effective punishment of a cheater is anticipated
by greater activity in the dorsal striatum, a brain region that delivers the satisfaction
of attaining a desirable outcome (de Quervain, Fischbacher, Treyer, Schelhammer,
Schnyder, Buck, et al., 2004).
Judgments of fairness permeate organizational life. Comparisons of pay raises and
the distribution of scarce budgets, promotions, grades, and prices are just a few of the
many situations in which we make fairness judgments that affect our emotions and behaviors.
Judgments of fairness are based on more than objective reality. It is probably
not realistic to attempt to eliminate concerns for fairness and social comparisons from
our decision-making repertoire. Nevertheless, when faced with the question of whether
you should go to the effort to punish an individual or a firm that behaved unfairly,
rational decision makers may want to consider the internal conflict that we explored in
Chapter 5 between the ‘‘want’’ and the ‘‘should’’ selves. You may be angry and want to
punish someone, but should you? Would doing so truly be in your interest?
Even if you ignore fairness concerns in your own judgments, there is ample evidence
that people will use fairness and social comparison information to judge your
actions. Thus, understanding how people judge fairness may help you make better decisions
in both your personal and professional life. In the second half of this chapter, we
turn from thinking about how people evaluate the fairness of others’ actions to the issue
of ethics. In contrast to fairness issues, ethical issues concern how we judge our own
behavior and its consistency with our own values.
BOUNDED ETHICALITY
Following the many corporate scandals that coincided with the start of the new millennium,
the media looked for the underlying cause of the unethical behavior that caused
the scandals. Popular targets of the media’s blame included a handful of ‘‘bad’’ people