Exploring the Psychology of Wealth, 'Pernicious' Effects of Economic Inequality

http://www.pbs.org/newshour/bb/business/jan-june13/makingsense_06-21.html

by deusclovis • 13 years ago

45 45 13 years ago

pbs.org

jstanley• 13 years ago

I don't think the example with the sweets is fair. The participants were explicitly told that they can take some.

DougN7• 13 years ago

Yes, it was OK to take _some_, but why did the rich take _more_?

thedrbrian• 13 years ago

Well they're just hacking the system, seeing just how much they can get away with, seeing just how far they can push the rules before someone explicitly tells them to stop.

ashray• 13 years ago

Maybe the rich are more comfortable with taking more. Or the notion of 'I deserve more'. Maybe that's why they got rich ? Maybe pushing the boundaries is what it's all about - whether that means not stopping for pedestrians - or taking more candy ?

francoisdevlin• 13 years ago

When you are used to having money, you're more likely to think that material things can be replaced. A bag of candy is a much smaller deal when you make 100k a year as opposed to 20k, so you don't think as much of it.

Just one thought.

sp332• 13 years ago

Because their sympathy isn't the same anymore. All of the people thought: if I were running this, how much would I be OK with people taking? So the people with less money took less because they assumed the people running the show were like them. And the rich people took more, for the exact same reason.

venomsnake• 13 years ago

Because morality is a poor man's companion.

If you look trough a lenses where everything is a business decision (whether ingrained or just habit acquired after doing it for 8 hours per day as a job) it will wrap your worldview that way.

The savvy business decision is to take as much as possible.

That reminded me of something I read a few month ago - maybe even here on HN - gamers don't have as scary nightmares. We are so used to killing weird stuff in weird worlds that when something nightmarish happens we take control in our dream and fight back. http://kotaku.com/5547398/video-gamers-have-power-over-their...

It is the same with the businessmen - after learning to ignore morality in the office - you cannot turn it on for the small stuff.

pandaman• 13 years ago

There could be many explanations not involving "evilness" of the rich that they (Berkeley folks) did not control.

E.g. if you perceive candy as free then you take as much as you want, but if you are aware of its price you will limit yourself.

Or that people who use their brain more also like sweets more.

Or that the person conducting the experiment was aware about wealth of each test subject (i.e. it was not a double blind test) and affected the outcome accordingly.

Etc. etc.

sokoloff2• 13 years ago

My view would be that the children are not being deprived of candy. If you assume (as I naturally would) that the supply of candy is infinite from the perspective of the children in the other study, then you're simply being offered candy and should take as much as you want to eat now. (Taking the bowl home to use for Halloween give-always is out of bounds, but anywhere in the 0-5 pieces doesn't seem to be remotely a moral question to me.)

I think extrapolating that the rich are literally taking candy from babies is a stretch too far to me.

tagawa• 13 years ago

From the article, there's "an apparent link between wealth and, well, unseemly behavior", but is that because in some cases, unseemly behavior leads to increased wealth? It's the same old correlation/causation question that doesn't seem to have been looked into.

ufo2• 13 years ago

From what I read it seems that they controlled for that. Even in the experimental game setting, where both players are just as rich in real life, the player thats richer inside the game starts exibiting those unseemly behaviours.

But we found consistently with people who were the rich players that they actually started to become, in their behavior, as if they were like rich people in real life. They were more likely to eat from a bowl of pretzels that we positioned off to the side. They ate with their mouths full, so they were a little ruder in their behavior to the other person.

hristov2• 13 years ago

Yeah but in this case, they did not say that they showed that the "fake rich" player engaged in cheating or breaking rules. All they could show is that the "fake rich" player attributed their success to their own skill when it was obvious that the rules were significantly tilted in their favor.

So I believe the grand parent post still makes a very good point.

notahacker• 13 years ago

The monopoly experiment as described in the article doesn't sound like especially convincing evidence for the hypothesis that wealth makes people inconsiderate though: the researchers - with openly stated personal biases - observed that people playing a game rigged in their favour snacked more, and then usually didn't dispute their entitlement to win the game after winning. I don't believe that actually illustrates anything about wealth at all. You'd have to go some way to convince me that Monopoly is a good proxy for wealth, never mind explaining away competing explanations for the exhibited behaviour not associated with courtesy or wealth (winners are generally not disposed towards disavowing their entitlement to win, and those with a simpler challenge have every reason to enjoy themselves more or concentrate less). If his findings suggested that people that started off "rich" were more likely to feel they deserved to win than winners of a fair game it would have been a more interesting finding...

dllthomas• 13 years ago

Did you read the article? They were able to reproduce the effects by making people feel richer, by giving them a leg up in Monopoly, after determining which player would get said leg up by a coin toss. Unless you think participant wealth was substantially impacting that coin toss, they did rule out correlation (and causation in the other direction) being the sole explanation.

eweise• 13 years ago

Why add a comment when you didn't read the article?

riggins4• 13 years ago

I didn't like the intersection example.

They say drivers of high end cars are more likely to 'break the law'.

That's true but in this case I think it's just a civil issue. I phrase it differently. Since this is a civil issue (i.e. just a fine) I'd phrase it as drivers of luxury car are more likely to risk a fine of X$. At that point you have a totally banal observation.

What would be interesting is to separate out the price sensitivity from the behavior.

For example, maybe fines should be based on a percentage of income instead of an absolute amount. Say 1% of income (with an absolute minimum).

So if you run an intersection and you have the median income (40K) the fine is $400. If you run an intersection and you make 500K ... the fine is $5000. I bet you'd see the discrepancy narrow or disappear.

ufo2• 13 years ago

But is stopping at the light really about avoiding fines? For most people I know, that kind of trafic rule is more about respecting fellow drivers and pedestrians than its about avoiding a monetary penalty.

The only real exception is speed limits because in that case, respecting other people has more to do with keeping the same speed as everyone else than driving under an arbitrary limit.

riggins4• 13 years ago

I don't know. that's why I said it'd be interesting to separate the behavior from the price sensitivity.

gregpilling• 13 years ago

or you could get caught speeding and face a fine of $1,000,000 http://www.autoblog.com/2010/08/13/swedish-man-may-pay-large...

riggins4• 13 years ago

cool. so some countries already have % of income based fines.

leot• 13 years ago

The compromise they have in Ontario is that infractions get you demerit points as well as fines. Get enough demerit points and you lose your license.

hristov2• 13 years ago

It is not merely a civil issue it is about safety. If you do not stop in front of those zebra walks when a pedestrian is present you can easily run someone over.

jackbravo• 13 years ago

Then put a minimum fine, that covers the safe issue, and if your earnings go above a certain amount then you pay a percentage.

powertower• 13 years ago

I'm not even sure how they've ruled out that the drivers of the luxury brand cars are simply more likely to be in a rush, living more stressful lives, etc.

And just go straight to - it must be because of wealth inequality that they do these things!

Then they conveniently leave out the difference between minor traffic violations and more serious crimes like rape, murder, etc; and instead talk about how the rich take 2x more candy from children.

loceng• 13 years ago

They have this in certain countries, and may even be based on your overall networth - as it's not hard to make your salary be $0 per year..

PaulHoule• 13 years ago

Massachusetts drivers are notorious for their bad behavior, enough so that when you cross the border to NH, NH has signs "Drive courteously, it is the New Hampshire Way."

It's better now, but back in the 1980's, "massholes" were famous for driving in the breakdown lane when traffic got tight, often jamming up the breakdown lane as well as all the other lanes.

The signature "masshole", however, is the driver of a rear-wheel drive European car. I remember one time I was driving 495 at 2AM in the morning in heavy rain and heavy traffic with an average speed of about 85 mph. I didn't have enough traction to feel safe driving at that speed, but it didn't seem safe to drive 30 mph less than prevailing traffic either. Then all of a sudden a sports car comes up from behind me and passes me in the breakdown lane at what must have been at least 110 mph.

(At least he didn't get in trouble like the drunk who I saw driving the wrong way in Boston and then hit a police car head on)

gwern• 13 years ago

I put together citations & fulltext links for some of these studies in http://lesswrong.com/lw/dtg/notes_on_the_psychology_of_power...

abbazabba2• 13 years ago

I want to play devils advocate here.

Whenever anyone offers "some" amount of anything, candy in this case, is it wrong to take all but one? They're rationally maximizing their holdings within the bounds specified. Therefore, if they follow this lifestyle for every decision that comes about, they'll be in some sense richer, or more optimal, than people who don't take all but one.

In other words, anytime the rules are ambiguous, why not test them?

I'm curious if anyone thinks this is neither right nor wrong?

rquantz2• 13 years ago

I want to play devils advocate here.

You seem to be pretty much in line with most of the people commenting here, who largely assume there are methodological problems with the studies rather than accepting the findings that wealth causes moral decay.

Whenever anyone offers "some" amount of anything, candy in this case, is it wrong to take all but one? They're rationally maximizing their holdings within the bounds specified.

Yes, this could account for why that person is wealthier. But it is not moral behavior. Someone who says "the rules do not strictly prohibit me from taking as much candy from the children as I feel like, therefore I will do so" is a cancer on society, someone who takes as much as they can get away with, everyone else be damned.

In other words, anytime the rules are ambiguous, why not test them?

Because there are other people, and you should consider their needs and wants in addition to your own.

abbazabba2• 13 years ago

Thanks for the insight. But why is taking a little bit more here and there considered immoral? Isn't it the fault of the people setting the specifications, or rules, or laws for failing to be specific?

Is there anyone else that shares my thoughts?

eli_gottlieb• 13 years ago

Devil is right. You're a psychopath, by which I mean that you appear to have not thought about the issue, or you lack many of the "limiting factors" built into ordinary people's senses of decency, morality, and value.

For instance, if I were to rationally maximize my net worth, I would spend 100-hour workweeks at Goldman Sachs becoming King of the Quants. Why don't I do so? Don't I want to be wealthy?

Well, sure, I like being financially secure, but working 100-hour workweeks and being involved in finance capitalism would actually make me so damn miserable I'd want to kill myself. And that's even before we talk about the damage I'd be doing to my closest relationships and the world at large through this "optimal" plan to get rich through genius and hard work!

sudhirj• 13 years ago

I can share some observations based on changes in my own life.

I've always considered myself and safe and considerate driver. I'm quite nice to people on the road and I usually stop for pedestrians even though we have no law enforcement in this regard here in India.

I recently bought myself the most expensive locally made bike available here, which also happens to be the biggest and most powerful on the road (http://www.youtube.com/watch?v=sKuTFO4wXbw). This also happens to coincide with a change of jobs and a substantial 250% increase in pay, suddenly putting me well into the 0.1% in my city.

Do I stop / slow down for pedestrians less often? Yes.

Do I ignore homeless people and beggars more often? Yes, but I rationalize that by telling myself I don't want to encourage them.

Would I take the candy? No. But I might if they were AWS credits that were being used for entertaining children with games. I might not if they were going to the Khan Academy instead.

Do I feel entitled to all this? Maybe. I do try to be the best at what I do, love programming and spent a lot of time learning to negotiate for what I think my skills are worth. On the flip side I've started to assume that everyone has had the same opportunities and possibilities that I've had, and that if they wanted a better life they should have worked harder for it.

Exploring the Psychology of Wealth, 'Pernicious' Effects of Economic Inequality

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