Link Between Wealth and Homo Economicus Behavior?

Do individuals who earn higher income behave more like John Stewart Mill’s Economic Man? In other words, does wealth increase the likelihood of greedy predispositions and thus increased “unethical behavior”? New research published in the early edition of  the Proceedings of the National Academy of Sciences seems to suggest this very result.

Researchers from the the University of California, Berkeley and Rotman School of Management, University of Toronto have conducted a series of studies (several of the them experimental) which suggest that wealthier people participate in more unethical behaviors; specifically because they view greed in a more positive light.

In the first two studies Piff et. al. (2012) literally observe whether vehicles cut-off other vehicles at a four way intersection. Research assistants coded the age, make, and model of the vehicles in each case to index social class (with the assumption that more expensive cars indicate higher social status. They also looked at whether cars would cut-off crossing (confederate) pedestrians. Both behaviors defy California Vehicle Code. They find that people driving cars associated with higher socioeconomic status (SES) were (statistically) significantly more likely to participate in both “unethical behaviors”. OK, not convinced?

In the third study participants reported their SES and other demographic information. Participants then read eight stories about actors “unrightfully” benefiting or taking something and then asks respondents if they would be likely to participate in the same behavior. One again, individuals with higher SES were more likely to say they would participate in the same behaviors (the behaviors were not reported but I can only assume they involved monetary benefits of some sort).

The fourth experiment is the best. Essentially, “Participants experienced either a low or high relative social-class rank by comparing themselves to people with the most (least) money, most (least) education, and most (least) respected jobs… This induction primes subjective perceptions of relatively high or low social-class rank” (Piff et. al. 2012, p. 2). This process activated social-class mindsets in the participants. The researchers then presented the participants with a bowl of candy and told them it was for children in the study in the next room, but they could have some if they wanted. The number of pieces of candy was then self-reported by the participants after a series of mock tasks unrelated to the experiment. Yep, you guessed it, people with a higher SES mindset took more candy from children – what is more unethical than that! Again, the candy can be looked at as something of monetary value or material benefit.

Study five linked positive attitudes toward greed to unethical behavior. Participants not only reported their SES but also took a survey which gauged the extent to which they believed it is justified and moral to be greedy. Participants were then placed in the position of bargaining over salary with an employee seeking “long-term” employment at their organization. However, the participants had a vital piece of information, the job position was only “short-term”. Would the participants tell the applicant? Once again, those of higher SES status were less likely to tell the applicant. But there is a twist, once “greed” was taken into account SES was no longer a statistically significant predictor of telling the applicant about the short-term position. Thus, the researchers conclude that it is actually one’s predisposition toward greed that accounts for “unethical” behavior and predisposition toward greed tends to be highly correlated with wealth. Negotiating over salary for a long-term position vs. a short-term position is very different and the private information can be a valuable during the negotiation. Again this relates to monetary value.

In study six, participants were told to roll a fair die (on a computer simulation) several times and then report the total number of points from all rolls. They were told that higher rolls would give them a higher chance of “winning” money. The participants didn’t know that the simulation was rigged and capped at 12 total points every time. Those with higher predispositions toward greed were more likely to lie and say their total was higher than 12 – again without the greed measure in the regression SES was significant, but once the greed measure was included SES no longer mattered. This was blatant monetary incentive.

In the final study, the researchers primed participants of both high and low SES to be greedy. They asked participants three things about their day (which was the neutral group) or three benefits of greed (the treatment group). After the prime, the researchers measured attitudes toward greed. Again SES was reported as well. The researchers then asked questions which gauged their propensity toward greed (i.e. stealing cash, receiving bribes, or overcharging customers). They found that those that were primed to be greedy were more likely to participate in unethical behavior. In fact,

“lower-class individuals were as unethical as upper-class individuals when instructed to think of greed’s benefits, suggesting that upper- and lower-class individuals do not necessarily differ in terms of their capacity for unethical behavior but rather in terms of their default tendencies toward it” (Piff et. al. 2012, p. 3).

Once again, the “unethical behaviors” were in relation to greater monetary incentives.

This study has garnered a lot of press today and has been interpreted broadly with what I would call normative  biases (i.e. see I told you rich people were evil). A lot of people including the researchers have used the 2008 crisis as anecdotal evidence of wealthy people partaking in unethical behavior. The researchers also remind us that, “Religious teachings extol the the poor and admonish the rich with claims like, ‘It will be hard for a rich person to enter the kingdom of heaven'”.

However, I think it is important to note that the study demonstrates evidence that greed is linked with unethical behavior – not necessarily wealth. It may very well be that higher SES is correlated with greed, but we don’t know whether a default predisposition toward greed leads to greater wealth over one’s lifetime rather than increased wealth leading to greed. In fact, I think the former is more compelling that the latter. After all, we do live in a capitalist economy where greed tends to be rewarded.

What I find strange is the title of the piece, “Higher Social Class Predicts Increased Unethical Behavior”. This is not what the study finds, however. It is clear that the researchers find that “greed” trumps SES – as people with lower SES are just as likely to participate in unethical behavior when primed to believe that “greed is good”. Moreover, outside of the vehicle behavior studies, the research seems to equate wealth seeking behavior with unethical behavior.

After all, Homo Economicus, according to Mill, “is concerned with him [man] solely as a being who desires to possess wealth, and who is capable of judging the comparative efficacy of means for obtaining that end.”

References

Mill, John Stuart. (1836) “On the Definition of Political Economy, and on the Method of Investigation Proper to It.” London and Westminster Review.

Piff, Paul K., Daniel M. Stancato, Stéphane Côté, Rodolfo Mendoza-Denton, and Dacher Keltner. (2012). “Higher Social Class Predicts Increased Unethical Behavior”. PNAS (Early Edition).

 

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