December 10, 2009
Fairness Perceptions Differ When Money Involved
Goods that have perceived innate value elicit a different mental state and sense of morality than mediums of exchange do.
A study to be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, shows that when it comes to distributing resources, people’s ideas about what’s fair change depending on what’s being handed out. If it’s something that has its own intrinsic value – in-kind goods such as food or vacation days – people are more likely to see equal distribution of such items as fair.
But if it’s something that is only valuable when it’s exchanged – such as money or even credit card reward points – ideas of fairness shift to a more market-based attitude. In that case, the thinking is that people should receive according to what they’ve contributed.
“What exactly is it about money that causes people to treat it so differently than other resources?” asks Sanford DeVoe, an assistant professor of organizational behaviour, at the University of Toronto’s Rotman School of Management who co-wrote the paper with Columbia University’s Sheena Iyengar.
“The paper shows that it is the property of money being a medium of exchange,” Prof. De Voe says. “When you allocate something that only has its value in what it can be exchanged for, that is what activates a market mindset and really invokes these strong norms about input and effort leading to reward.”
So then do we have an innate market mindset capacity that was selected for? Can we manipulate our environment to cause us to spend more or less time with a market mindset? Do people who make more money spend more of their mental time with a market mindset?
I reject the conclusions of the article.
"A study to be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science, shows that when it comes to distributing resources, people’s ideas about what’s fair change depending on what’s being handed out. If it’s something that has its own intrinsic value – in-kind goods such as food or vacation days – people are more likely to see equal distribution of such items as fair."
It's not the intrinsic value of food or vacation days that causes people to see it differently than mediums of exchange.
If that was the case then people would inately feel that things of intrinsic value that are not mediums of exchange should be fairly distributed, but I think you'll find on reflection that that isn't true. I suspect that things like real estate and other property, for example, will not be things that people believe should be distributed evenly.
However, food and vacation days are two things that people understand as being essential minimums, and which are shared equally in our society in two different contexts as things to be shared by all. We are all human and so all need time off and food in roughly equivalent quantities. If we need more than the minimum, then we may exchange some of our exchangable resources for additional food or leisure time. However, people generally do not desire to deprive people of some minimum amount, as they feel that this would be unfair.
Another thing to note is that anything that a person recieve on exchange as a result of a bargain, whether money for time or property for money, is going to acquire an instinctual right of ownership both in that the person making the exchange will percieve them as being theirs and an observer is more likely to say that this is fair. Food and vacation time are generally not percieved as things acquired on exchange, but rather are more likely to be percieved as having the status of gifts ('benefits'). As gifts, we are much more likely to assume that they should be shared equally, or at least that the gift giver has the right to decide to share them equally.
Anthropologists have noted that hunter-gathers show different patterns in sharing between food that is hunted versus food that is gathered. Hunted food, meat, is shared almost perfectly equally regardless of contribution whereas gathered foods like nuts are usually shared on a negotiated basis. Perhaps this behavior has genetic roots in our hunter-gatherer heritage. Perhaps we conceived of real goods as meat and money as nuts.
Meat is most likely shared perfectly evenly because most serious hunting is done cooperatively. Without an established procedure of sharing, every hunt would end in a squabble over the division which would reduce cooperation for future hunts. A lucky hunter one day maybe unlucky the next. It's better for the individual long term to make do with a physically equal share Gathered foods by contrast are usually gathered individually. Squabbles over division have less of an impact on an individual's long term consumption.
I have often wondered why as a species we seem to default to the ideal that we should share all material resources perfectly equally while we don't have a similar default for mates or status. We seem more genetically outraged by someone who hoards material resources than we are by someone who dominates and oppresses other human beings. Across virtually all cultures, those who trade and lend are reviled while those who kill and conquer are revered.
I don't think we're genetically adapted to the world we live in.
>>> “What exactly is it about money that causes people to treat it so differently than other resources?”
There's something of a bias in the supposition that it is "different" to think that people should only get what they earn. To my mind, it seems odd that people would treat items with an intrinsic value that way.
I think it's a matter of what people are accustomed to. Since we are paid in money we know that people should receive that which they earn. But if someone if handing around, say, coffee tables that seems more like a distribution, per se, without notions of earning them attached.
When I walk into my house with lollipops, each of my kids want an even share. When I'm handing out allowance, the one who raked the leaves wants more than the one who wouldn't help.
"I don't care about losing all the money. It's losing all the stuff."
Marie to Navin in the movie "The Jerk" (1979)
They had better start studying the "Barter World",
because at the rate this Nation is going,
that is what we will be reduced to.
It's an interesting study, but the conclusions seem out of kilter. I see few people who think that we should all have prime porterhouse steaks. Those who can afford them deserve them. People on food stamps don't. Ask anyone buying food with their own hard earned money if they think prime porterhouse steaks should be divided evenly. If you're talking about meals in a family style setting, then people expect equal shares. As to days off, I'm not sure where these people work, but working overtime gets comp time. High performers are sometimes rewarded with extra day off instead of cash. Very few people resent this unequal distribution of days off.
People expect equal distribution where they have been lead to believe that there will be equal distribution. They espect reward for effort everywhere else.
Seems to me there's an on-going battle to keep extending the list of things that get equally distributed.