Profit Maximization versus Disadvantageous Inequality: The Impact of Self-Categorization

Choice behavior researchers (e.g., Bazerman, Loewenstein, & White, 1992) have found that individuals tend to choose a more lucrative but disadvantageously unequal payoff (e.g., self—$600/other—$800) over a less profitable but equal one (e.g., self—$500/ other—$500); greater profit trumps interpersonal social comparison concerns in the choice setting. We suggest, however, that self-categorization (e.g., Hogg, 2000) can shift interpersonal social comparison concerns to the intergroup level and make trading disadvantageous inequality for greater profit more difficult. Studies 1–3 show that profit maximization diminishes when recipients belong to different social categories (e.g., genders, universities). Study 2 further implicates self-categorization, as selfcategorized individuals tend to forgo profit whether making a choice for themselves or another ingroup member. Study 3, moreover, reveals that social categorization alone is not sufficient to diminish profit maximization; individuals must self-categorize and identify with their categorization. Copyright # 2005 John Wiley & Sons, Ltd. key words choice; decision making; self-categorization; fairness; trade-offs; profit maximization; social identity; social comparison