Chapter 8 Fairness and Ethics in Decision Making
Multiple Choice
1. Businesses that adjust their prices upward in response to high demand, consistent with
economic laws of supply and demand, can experience which of the following outcomes:
a. Underperform other businesses that consider the norms of fairness.
b. Are punished by customers who are more sensitive to fairness than to economic
rationality.
c. Make larger profit than businesses that comply with norms of fairness.
d. All of the above
Ans: d
Response: p. 133-135
2. Which of the following condition can increase one’s willingness to engage in altruistic
punishment?
a. When the person who is behaving unfairly belongs to an in-group.
b. When the person who is behaving unfairly belongs to an out-group.
c. When the person who is treated unfairly belongs to an out-group.
d. When the person who is treated unfairly belongs to an in-group.
Ans: d
Response: p. 142
3. People display inconsistency by:
a. Preferring a nominal wage increase that does not cover inflation over a wage cut.
b. Punishing retailers that raise prices in response to demand.
c. Giving some money to the other party in ultimatum and dictator games.
d. Willingness to pay for punishment of unfair players.
Ans: a
Response: p. 134
4. Which bias underlies the tendency of people to overclaim credit for their contribution to an
outcome?
, a. The affect heuristic
b. Time discounting
c. Self-serving attributions
d. None of the above
Ans: c
Response: p. 145-146
5. Which of the following helps to eliminate the influence of fairness considerations?
a. Repeating games
b. Raising the stakes in games
c. Reducing the amount of available resources after an initial offer is rejected
d. None of the above
Ans: d
6. Research has shown that suppressing stereotypes against out-group members causes:
a. A gradual reduction in the strength of stereotypes.
b. A temporary reduction in cognitive capacity and a feeling of discomfort.
c. A transition in the nature of the suppressed stereotypes, such that they become
implicit.
d. An increase in people’s sensitivity to aggressive and violent behavior.
Ans: b
Response: p. 148
7. Researchers of bounded ethicality claim that the primary flaw of most ethical training is that:
a. It ignores the failure of disclosure to reduce conflicts of interest.
b. It fails to convince managers that they can benefit from lessons of ethical behavior.
c. It over-claims credit for its contribution to reduce unethical behavior.
d. It focuses too narrowly on explicitly unethical behavior.
Ans: d
Response: p. 158-159
8. Which false assumption is often made by professionals such as lawyers, financial advisers and
real-estate agents regarding potential conflicts of interest?
a. That situations in which they are involved do not pose conflicts of interest.
b. That they themselves are immune from the effects of conflicts of interest.
c. That they are honest and objective people.
d. That conflicts of interest lead only to unconscious corruption.
Multiple Choice
1. Businesses that adjust their prices upward in response to high demand, consistent with
economic laws of supply and demand, can experience which of the following outcomes:
a. Underperform other businesses that consider the norms of fairness.
b. Are punished by customers who are more sensitive to fairness than to economic
rationality.
c. Make larger profit than businesses that comply with norms of fairness.
d. All of the above
Ans: d
Response: p. 133-135
2. Which of the following condition can increase one’s willingness to engage in altruistic
punishment?
a. When the person who is behaving unfairly belongs to an in-group.
b. When the person who is behaving unfairly belongs to an out-group.
c. When the person who is treated unfairly belongs to an out-group.
d. When the person who is treated unfairly belongs to an in-group.
Ans: d
Response: p. 142
3. People display inconsistency by:
a. Preferring a nominal wage increase that does not cover inflation over a wage cut.
b. Punishing retailers that raise prices in response to demand.
c. Giving some money to the other party in ultimatum and dictator games.
d. Willingness to pay for punishment of unfair players.
Ans: a
Response: p. 134
4. Which bias underlies the tendency of people to overclaim credit for their contribution to an
outcome?
, a. The affect heuristic
b. Time discounting
c. Self-serving attributions
d. None of the above
Ans: c
Response: p. 145-146
5. Which of the following helps to eliminate the influence of fairness considerations?
a. Repeating games
b. Raising the stakes in games
c. Reducing the amount of available resources after an initial offer is rejected
d. None of the above
Ans: d
6. Research has shown that suppressing stereotypes against out-group members causes:
a. A gradual reduction in the strength of stereotypes.
b. A temporary reduction in cognitive capacity and a feeling of discomfort.
c. A transition in the nature of the suppressed stereotypes, such that they become
implicit.
d. An increase in people’s sensitivity to aggressive and violent behavior.
Ans: b
Response: p. 148
7. Researchers of bounded ethicality claim that the primary flaw of most ethical training is that:
a. It ignores the failure of disclosure to reduce conflicts of interest.
b. It fails to convince managers that they can benefit from lessons of ethical behavior.
c. It over-claims credit for its contribution to reduce unethical behavior.
d. It focuses too narrowly on explicitly unethical behavior.
Ans: d
Response: p. 158-159
8. Which false assumption is often made by professionals such as lawyers, financial advisers and
real-estate agents regarding potential conflicts of interest?
a. That situations in which they are involved do not pose conflicts of interest.
b. That they themselves are immune from the effects of conflicts of interest.
c. That they are honest and objective people.
d. That conflicts of interest lead only to unconscious corruption.
