People’s personalities, relationships, way of thinking, behavior depends on, well, lots of things. Money — no surprise here — is one of them. How money, having it, absence of it, lots of it, thinking of it affects people and their brains.
Neuroeconomics merges psychology, neuroscience and economics and emerges as a field of research to study “the human brain on money”.
Some of the conclusions are more surprising than others.
- Noblesse oblige? Nope. Research shows that money actually reduces empathy and compassion. Money also makes people behave more aggressively towards others.
Even fake money can do it. Researchers observed two students playing Monopoly, one with much more Monopoly money than the other. At first, the inequality seemed to make the richer student uncomfortable, but soon enough the student with more money got aggressive, smacking his pieces around and taunting the impoverished player.
- Losing money is pain in the ass. It hurts, and not metaphorically either. Researchers have found that the loss of money shares psychological and physiological system with physical pain.
Money actually serves as a pain buffer and the anticipation of pain heightens the desire for money. Apparently, people hate losing money even more than they love making it.
Psychologist and Nobel laureate Daniel Kahneman has suggested this aversion to loss may have evolutionary roots. For the primitive human, threats or losses were a higher priority than opportunities, because an opportunity might come again, but a threat could be your last.
- Researchers from Harvard and the University of Utah came to a conclusion that more money leads to fewer ethics. Surprise, surprise.
People were more likely to lie and make immoral decisions after being exposed to money-related words. Words, not even money itself!
The mere exposure to the concept of money set off a “business decision frame” in study participants, causing them to think narrowly in terms of cost-benefit calculations and further their own interests without giving a damn about moral niceties.
Money makes people dangerous, too.
Researchers at Berkeley observed crosswalks in San Francisco and found that people driving luxury cars were three times less likely than those in more modest vehicles to give the right away to pedestrians, and they were four times more likely to cut off other drivers.
- Conventional wisdom “I need money not to obsess about money” does not hold true. The more money people make, the more they tend to think about money.
Jeffrey Pfeffer, a professor of organizational behavior at Stanford Graduate School of Business, found in his research that the more money people are paid for each hour of work, the more important that money becomes. Money becomes an important measure of self-esteem and self worth. The more people get, the more they need, and the more they focus on it. Paradox?
“The strange part is, the more I made, the more I got preoccupied with money. When suddenly I didn’t have to think about money as much, I found myself starting to think increasingly about it.” (Daniel Vasella, the former CEO of Swiss pharmaceutical behemoth Novartis AG)
Pfeffer is convinced that for its destructive social and psychological effects money should be “counted” pretty straightforwardly as addictive substance. His opinion on what could be done about skyrocketing executive compensation is simple:
“We would do what we have done with other — tax it. That’s what public policy has done in the past to restrict the use of legal drugs like alcohol and nicotine — we tax them.”
Because, Americans are supposed to worship the wealthy, don’t they? Oddly — or not? — they don’t.
According to research presented in Scientific American, most of people wouldn’t be too upset it the rich suffer. Studies show that lower-income people dislike and distrust the rich. So much so that people welcome news of rich folks’ misfortunes.
University of Pennsylvania research revealed that most people tend to associate profits with social harm. When participants in the U Penn study were asked to rate various real and made-up companies and industries, both liberals and conservative participants ranked institutions thought to have higher profits with more evil and wrong-doing across the board, regardless of the company or industry’s actions in reality.