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People Are Strange June 30, 2009

Posted by Dwight and Lynn Furrow in Dwight Furrow's Posts, Ethics, Science.
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Research reported in the Journal of Consumer Research demonstrates that when a customer is perceived to share a characteristic with a salesperson, even something as trivial as a birthdate, this perception increases the probability that the customer will purchase something.

If that sounds irrational consider this (via Ars Technica):

It has been well established that people are not coldly rational when money is at stake. They will make financial sacrifices in order to punish behavior deemed to be unfair.

One person is given a stack of cash, and told to divide it between themselves and a second party. That second party is then given the chance to accept or reject the offer; if it’s rejected, neither of them get any money. Clearly, any of this free money should be better than nothing, so under assumptions of strictly rational behavior, you might expect all offers to be accepted.

They’re not. Things in the neighborhood of a 50/50 split are accepted, but as the proportions shift to where the person issuing the ultimatum tries to keep seventy percent of the total, rejections increase. By the time they hit an 80/20 split, nearly 70 percent of the offers are rejected, even though that 20 percent of the total cash would leave the recipient better off than where they started.

New research shows that people will reject unfair transactions even when they punish only themselves. In this new research:

…the person making the offer gets their share of the cash regardless of whether the offer is accepted or not. In this game, the only consequence is the potential for guilt caused by the knowledge that an offer was rejected. Rejection rates do drop, but they remain substantial—offers of an 80/20 split got rejected over 40 percent of the time (down from around 70 percent) despite the lack of real economic consequences.

To really nail things down, the authors conducted tests of a Private Impunity Game, in which the person who made the offer wasn’t even informed of whether it was rejected or not—they simply walked away with their share of the cash. Here, even the nebulous hope that the person making the offer would feel pangs of guilt from its rejection was removed. Rejection rates were essentially unchanged. People keep rejecting offers they perceived as unfair, even if, like the proverbial tree in the forest, no one will hear their rejection.

Even when participants were forced to think through the logic of their behavior through a series of if/then statements, their behavior was unchanged.

What is the explanation for this strange behavior?

The lack of objective analysis is also demonstrated by a number of results that indicate that changes in the levels of hormones and neurotransmitters—testosterone, serotonin, and oxytocin, for example—can all skew the statistics by changing the average response to unfair offers.

Given the fact there’s essentially no way to provide a rational actor gloss to these results, the authors attempt to explain it through an emotional response that sounds much like a gorilla’s chest beating. Our emotions commit us to these sorts of displays despite their irrational nature, and force us to follow through on them often enough to make sure everyone knows it’s not an idle threat. Nine times out of 10, the chest beating may just be a display, but is anyone willing to risk the chance that a given instance will turn out to be the exception?

The problem with this explanation is that it adds a layer of complexity—a mechanism that ensures a degree of commitment to an emotional response—on top of what’s essentially a simple situation: people act without thinking. Earlier this year, I attended a discussion entitled “Evolution and the Ethical Brain” in which researchers argued that our ethical decision making (such as how to respond to unfair financial offers) is performed by a system that operates in much the same way as those that respond to sensory input: they make snap judgments that allow us to respond quickly and get on with things. The more elaborate ethical debates that we engage in are largely attempts at post-hoc rationalizations of our earlier decisions.

Within this perspective, the snap judgment is that an offer is unfair. Sometimes, we can engage the post-hoc rationalization, in this case involving the economics of the situation, and override our ethical calculations. But, in a substantial fraction of the cases, we never get the chance, as we act on our snap decisions before that process can occur.

Yet my students keep insisting we have free will!

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Comments»

1. Hot Coffee: The New Love Drug « Philosophy On The Mesa - July 20, 2009

[…] Here is an earlier post detailing more studies of apparently determined behavior. […]


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