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Financial compensation refers to the act of providing a person with money or other things of economic value in exchange for their goods, labor, or to provide for the costs of injuries that they have incurred. The aim of financial compensation is the preservation of relationships between those engaged in economic exchange.[1]

Kinds of financial compensation include:

Financial compensation is often provided after service delivery failure in order to regain customer trust.[2] An associated response is to offer an apology that communicates the transgressor feels remorse.[1]

Financial compensation may be offered as an incentive.[3] Some offers are too good to refuse. They may become an undue inducement in which they distort people's judgment, contravene their interests and thereby cause harm.[3]

Financial compensation may be imposed by a judge, before a court, to a victim.[4]

See also


  1. ^ a b Haesevoets, Tessa; Reinders Folmer, Chris; De Cremer, David; Van Hiel, Alain (April 2013). "Money isn't all that matters: The use of financial compensation and apologies to preserve relationships in the aftermath of distributive harm". Journal of Economic Psychology. 35: 95–107. doi:10.1016/j.joep.2013.02.003. hdl:1854/LU-3119438. Retrieved 9 November 2023.
  2. ^ Santos Gasparotto, Lisiane; Araujo Pacheco, Natália; Basso, Kenny; Francisco Dalla Corte, Vitor; Costa Rabello, Gisele; Gallon, Shalimar (February 2018). "The role of regulation and financial compensation on trust recovery". Australasian Marketing Journal. 26 (1): 10–16. doi:10.1016/j.ausmj.2018.01.002. Retrieved 9 November 2023.
  3. ^ a b Gordon, E.J.; Patel, C.H.; Sohn, M.-W.; Hippen, B.; Sherman, L.A. (February 2015). "Does Financial Compensation for Living Kidney Donation Change Willingness to Donate?". American Journal of Transplantation. 15 (1): 265–273. doi:10.1111/ajt.13004. Retrieved 9 November 2023.
  4. ^ T.M. Desmet, Pieter; De Cremer, David; van Dijk, Eric (August 2011). "Trust recovery following voluntary or forced financial compensations in the trust game: The role of trait forgiveness". Personality and Individual Differences. 51 (3): 267–273. doi:10.1016/j.paid.2010.05.027. Retrieved 10 November 2023.