Public-Sector Context Versus Private-Sector Context as a Mediator of Financial Allocation Decisions

Abstract

This study hypothesized that financial decision makers who felt responsible for previous monetary losses in public-sector conditions would allocate less to their specific projects than their nonresponsible counterparts would. The subjects were 320 undergraduate psychology students; 46% were male and 54% were female. Subjects were given a scenario involving a state agency's employability program with a declining placement rate, and asked to determine which of two sponsors would be the recipient of additionalfunds. The factor of responsibility was manipulated and the experiment was repeated in a private-enterprise setting. Results indicated that in public-context conditions, responsible subjects allocated significantly less money than did nonresponsible subjects, although this was not the case in private-context conditions. The findings suggest differential strategies for guiding allocation behavior in different contexts.

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