Research Lead: Economic Psychology

 

Wealth and Unethical Behavior: Understanding the Relationship Between Social Class and Moral Decision-making

[Economic & Social Psychology]

The fallout from the 2008 financial crisis left a bitter taste in the cultural imagination, a sense that the rich and powerful don’t play by the same rulebook as everyone else. Recent experiments¹ have suggested that there is in fact some truth to this idea, finding that higher social class—defined by education and wealth—predicts unethical decision making. Behavioral scientists David Dubois, Derek Rucker, and Adam Galinsky reaffirmed this finding in their March 2015 paper, but they also identified situations in which the reverse was true.

It’s important, they argue in their series of six studies, to keep “selfish” conceptually distinct from “unethical” when evaluating moral decisions. For instance, one student could lie to avoid getting in trouble, while another could lie to help a friend avoid getting caught for cheating; both students act unethically, but only one acts solely in her self-interest. The researchers found that people of a higher social class were more likely to behave unethically when they would personally benefit. By way of contrast, people in a lower social class acted unethically when individuals other than themselves stood to gain. In other words, wealth predicted selfishness rather than unethical behavior per se.

This study did not ascertain causality, which is to say there’s no reason to believe that being wealthy makes you selfish, nor that selfish people become wealthy. Instead, these results add an important caveat to the research on class and morality: both upper class and lower class people can do unethical things, but the reasons and contexts in which it occurs likely differ between the two groups. This has important public policy implications, suggesting that it can pay dividends to know your audience when trying to ensure that everyone is playing by the same rules.

1: Piff, P. K., Stancato, D. M., Côté, S., Mendoza-Denton, R., & Keltner, D. (2012). Higher social class predicts increased unethical behavior. PNAS, 109, 4086–4091 (pdf).

 

Sacrificing Ethics to Achieve Money and Status, a Gender Difference

Underrepresentation of women in high-paying, executive positions within the business sector is a widely-recognized, though stubbornly persistent, phenomenon. Whereas much past research into the source of this disparity emphasizes external barriers such as stereotypes, social roles, and backlash, more recent research has focused on how women’s own perceptions and choices lead them away from such positions. Kennedy and Kray add to this alternative current by examining how women’s perceptions of ethical compromises might disincline them to pursue careers that are often expected to make such tradeoffs.

In a series of three experiments, the researchers found that women reported more moral outrage than men when presented with scenarios detailing ethical compromise for business gains, such as achieving company goals and increased profits. Similarly, though women did not indicate less baseline interest in business jobs than men, they expressed less interest when the positions involved such compromise, and showed stronger implicit associations between “business” and “immorality” than male participants. Kennedy and Kray also introduced a new factor to the literature by examining the role of “social status as a driver of ethical compromise.”

In conjunction with past research, the authors indicate that such results should not be seen as reason for women to avoid the business sector; instead, they suggest women’s advancement is an opportunity to bring business practices closer in line with social morality on a broad scale.  At any rate, it is becoming increasingly apparent that shattering the infamous “glass ceiling” is not just a matter of lifting women up for their own sake.

“Money, Well-Being, and Loss Aversion”

[Economic Psychology]

Do the negative psychological consequences of a pay cut differ in magnitude than the positive psychological consequences of a pay raise? Researchers haves shown that people tend to be loss averse. That is, people anticipate losses, in money for example, will have greater negative effects than an equally sized gain will have positive effects. While a significant body of research demonstrates the effect anticipated losses or gains have on anticipated well-being, a recent study, published in Psychological Science, Boyce et. al set out to examine the actual effects of pay cuts and pay raises on actual psychological well-being. Boyce et al. utilized two large, longitudinal, national datasets from German and British Households to compare changes in income to changes in subjective well-being. The researchers found that actual raises and cuts in income have similar psychological effects as anticipated raises and cuts, and thereby provide the first evidence that the concept of loss aversion applies to both anticipated and actual experience. Thus, a lower income, if stable, may be better for psychological well-being than a higher, but less stable one. Such findings have significant sociopolitical implications, as small reductions in national income levels, for example, may negate the increases in subjective well-being that a nation’s inhabitants receive from overall income growth.

 

“Mere exposure to money increases endorsement of free-market systems and social inequality”

[Economic Psychology]

How does the concept of money affect an individual’s perception of the social and economic systems in the United States? A research team lead by Eugene Caruso found that individuals who were merely exposed to a computer background image of $100 dollar bills while reading the instructions of the experiment (compared with those who were not), were more likely to: 1) endorse a free-market ideology, 2) justify the current social order of the United States, 3) believe that the world is just (people get what they deserve), 4) believe that it is acceptable for some social groups to dominate others, and 5) structure resources according to a free-market ideology. The researchers suggest that activating an individual’s concept of money may lead him/her to believe in and even promote social and economic systems that maintain and foster inequality.

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