If you are kind to me, I am likely to reciprocate and doing so feels fair. Many theories of social exchange assume that such reciprocity and fairness are well aligned with one another. We argue that this correspondence between reciprocity and fairness is restricted to interpersonal dyads and does not govern more complex multilateral interactions. When multiple people are involved, reciprocity leads to partiality, which may be seen as unfair by outsiders. We report seven studies, conducted with people from the (...) United States, in which participants were asked to evaluate situations involving resource distribution in contexts such as economic games, government, and the workplace. Specifically, we find that equal resource distribution in multilateral interactions is seen as more fair than engaging in reciprocity. We also find that negative reciprocity is seen as more fair than positive reciprocity in these multilateral situations because positive reciprocity is perceived as based in favoritism. We rule out alternative explanations and demonstrate that there are contexts where favoritism is not viewed as unfair. These findings are important for theories of fairness and reciprocity as they demonstrate the central role of perceived partiality in the evaluation of multi‐party resource allocation. (shrink)