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Resource Allocation Decisions: When Do We Sacrifice Efficiency in the Name of Equity?

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Interdisciplinary Perspectives on Fairness, Equity, and Justice

Abstract

Equity, or the idea that one should be compensated according to one’s respective contribution, is a fundamental principle for resource allocation. People tend to endorse equity in a wide range of contexts, from interpersonal relationships to public policy. However, at times, equity might come at the expense of efficiency. What do people do when they must waste resources to maintain equity? In this chapter, we adopt a behavioral perspective on such equity–efficiency trade-offs, reviewing the relevant findings from the social psychology, judgment and decision-making and behavioral economics literature. We show that whereas allocators will often choose to waste in the name of equity, this is not necessarily the case. We review various psychological aspects that affect the allocators’ decision.

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Author information

Authors and Affiliations

  1. Psychology Department, Ben-Gurion University of the Negev, Beer Sheva, Israel

    Tom Gordon-Hecker & Yoella Bereby-Meyer

  2. Jerusalem School of Business Administration and the Federmann Center for the Study of Rationality, The Hebrew University of Jerusalem, Jerusalem, Israel

    Shoham Choshen-Hillel

  3. Department of Economics, Center for Research in Experimental Economics and Political Decision Making (CREED), University of Amsterdam, Amsterdam, Netherlands

    Shaul Shalvi

Authors
  1. Tom Gordon-Hecker
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  2. Shoham Choshen-Hillel
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  3. Shaul Shalvi
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  4. Yoella Bereby-Meyer
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Corresponding author

Correspondence to Tom Gordon-Hecker .

Editor information

Editors and Affiliations

  1. Department of Health and Behavioral Sciences, University of Colorado Denver, Denver, Colorado, USA

    Meng Li

  2. Departments of Health and Behavioral Sciences and Anthropology, University of Colorado Denver, Denver, Colorado, USA

    David P. Tracer

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Gordon-Hecker, T., Choshen-Hillel, S., Shalvi, S., Bereby-Meyer, Y. (2017). Resource Allocation Decisions: When Do We Sacrifice Efficiency in the Name of Equity?. In: Li, M., Tracer, D. (eds) Interdisciplinary Perspectives on Fairness, Equity, and Justice. Springer, Cham. https://doi.org/10.1007/978-3-319-58993-0_6

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