More Money, More Trust? Target and Observer Differences in the Effectiveness of Financial Overcompensation to Restore Trust

Recent research revealed that despite its financial costs, overcompensation is not more effective to restore trust in the perpetrator than equal compensation. In a lab experiment (N = 115), we compared the effects of these compensation sizes for both targets of the compensation and non-involved observers. It was revealed that overcompensation did not yield superior outcomes than equal compensation. Specifically, for targets overcompensation resulted in lower levels of trust than equal compensation, while for observers equal compensation and overcompensation resulted in similar levels of trust. This finding suggests that overcompensation is not a cost-effective trust repair strategy, neither for the targets nor for third party observers. Other implications are discussed as well.