(1)THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR

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(1)THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. RIJKSUNIVERSITEIT GRONINGEN. MASTER OF SCIENCE OF BUSINESS ADMINISTRATION INTERNATIONAL FINANCIAL MANAGEMENT. I KEPT THE MO EY BECAUSE OTHERS DID SO: THE I FLUE CE OF A GREEDY CO TEXT A D SOCIAL ORM O BEHAVIOR. FEMKE JONGERIUS S1407848. JUNE, 2010. UNIVERSITY SUPERVISORS: M. M. KRAMER C. L. M. HERMES. -0-.

(2) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. ABSTRACT As a result of the financial crisis, greedy behavior has had quite some attention in nowadays’ press. Some topics raised by journalists, politicians, presenters, and citizens touch(ed) upon the issue whether greed is mainly responsible for growth and development, or whether it is, in the end, generally accountable for downturn and crisis. Whatever our ideas about the function and drawbacks of greedy behavior, insights in its activation in human behavior is highly valuable. If we know the occasions in which greedy behavior in individuals are most likely activated or deactivated, politicians and the like can base their policymaking strategies on this knowledge, especially within the financial environment. With greed being an emotion barely researched within the literature, the present paper investigates its presence as a result of a person’s (social) environment. More specifically, we expect people to be encouraged to act greedy when they are confronted with a greedy context or social norm. In two experimental studies we examined whether greedy behavior in financial decision making is indeed influenced by a person’s environment. Also, we investigated whether people become increasingly greedy when higher amounts of money are involved. In the first experiment participants had to play a Dictator Game after being manipulated by a greedy vs. fair social norm combined with a greedy vs. fair context. The second experiment was identical to first one, except for a change in the social norm manipulation. The collective results of the two studies suggest that (a) a greedy social norm can foster greedy behavior depending on the framing of the norm, (b) people become increasingly greedy when higher amounts of money are involved, and (c) greediness depends on a person’s stable personality traits.. -1-.

(3) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. I DEX 1. Introduction.............................................................................................................................. 4 2. Theoretical Background ............................................................................................................ 7 2.1 A definition of greed ..................................................................................................................... 7 2.2 Game Theory: Fairness versus self-interest ................................................................................. 7 2.2.1 The Ultimatum Game: The role of self-interest ..................................................................... 9 2.2.2 The Dictator Game: The role of fairness............................................................................... 11 2.3 The adaptive function of greed and fairness ....................................................................... 13 2.4 Framing effects.................................................................................................................. 14 2.5 Contexts and social norms ................................................................................................. 16 2.6 Personality differences ...................................................................................................... 19 2.7 Amount of money ............................................................................................................. 19 2.8 Other important factors.............................................................................................................. 20 2.8.1 Payment ................................................................................................................................ 20 2.8.2 Anonymity............................................................................................................................. 21 2.8.3 Gender .................................................................................................................................. 22 2.8.4 Culture .................................................................................................................................. 22 2.8.5 Wealth .................................................................................................................................. 24 2.8.6 Education .............................................................................................................................. 24 3. Methodology .......................................................................................................................... 25 3.1 Social Value Orientation .............................................................................................................. 25 3.2 Context manipulation .................................................................................................................. 27 3.3 Norm manipulation...................................................................................................................... 27 3.4 Procedure..................................................................................................................................... 28 4. Descriptive statistics and results .............................................................................................. 29 4.1 Experiment I ................................................................................................................................. 29 4.1.1 Descriptive statistics ............................................................................................................. 29 4.1.2 Results................................................................................................................................... 29 4.1.3 Short Discussion.................................................................................................................... 33 -2-.

(4) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 4.2 Experiment II ................................................................................................................................ 34 4.2.1 Descriptive statistics ............................................................................................................. 34 4.2.2 Results................................................................................................................................... 35 5. General discussion .................................................................................................................. 42 5.1 Limitations and Directions for Future Research .......................................................................... 46 5.2 Conclusion .................................................................................................................................... 46 6. References .............................................................................................................................. 47 Appendix I .............................................................................................................................................. 51 Appendix II ............................................................................................................................................. 51 Appendix III ............................................................................................................................................ 52 Appendix IV ............................................................................................................................................ 53. -3-.

(5) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 1. I TRODUCTIO. In recent press, greed has been widely used to describe mechanisms within our worldwide economy: greed may have caused the financial crisis, excessive bonuses fueled by greed might have brought on short-term thinking, and greediness may be a source of excessive risk-taking. Alternatively, several theories explain greed to be a useful emotion, helping people to get progressively food, money and possessions. Although greed seriously seems to influence the economic environment, whether it be positively or negatively, the topic has not been extensively researched. In his book about greed, Robertson (2001) observes that the term is used frequently in journalism but rarely in contemporary scholarship. Robertson convincingly argues for increased scholarly attention to greed1. As an answer to this urge, the specific purpose of the present research is to investigate the influence of people’s environment on their own greedy behavior. Greed is found to be closely linked to individuals’ stable personality traits (see McClintock, 1968; Van Lange, 1999; and Kelley et al, 2003), a topic extensively described later on, but it also seems to depend on the typical situation a person is in. Experimentally enhanced feelings of empathy regarding a specific person, for example, decrease greedy behavior (Batson & Moran, 1999). From studies exploring behavior in the Ultimatum Game, we know that greed within individuals can also decrease as a result of strategic concerns (see Gilliland, Steiner, Skarlicki, van den Bos, 2005), while results about fairness found in dictator games cannot be explained by such motives. Lately, several researchers argue that the extent to which people act greedy within dictator games can be partly explained by the social norms created by the framing of the game (see List, 2007; and Bardsley, 2007). Unfortunately, the extant literature is too limited to confirm this hypothesis. The present research aims to investigate the topic of framing. Our work is based on the assumption that we do not make decisions in a vacuum: Although our behavior is shaped in part by our own personality, the decisions we make are also socially defined (Festinger, 1954). That is, we also understand and determine our own behavior in relation to the beliefs we hold about the context 1. For the interested reader, see chapter 1 from the book ‘Greed: gut feelings, growth, and history’ by Robertson (2001) for arguments about the need for increased scholarly attention to greed.. -4-.

(6) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. and social norms surrounding us. First, we propose that the existence of a greedy context and social norm increases people’s tendency to act greedy themselves. Second, we expect this mechanism to depend on a person’s stable personality traits. Finally, we suggest that people also become more greedy when higher amounts of money are involved. The question we try to answer is: Do a greedy (fair) context or social norm and higher amounts of money increase individual’s tendency to act greedy (fair) themselves, depending on their stable personality traits? In the present research we describe results of two studies in which we experimentally examined the influence of a context and social norm on behavior. More specifically, the experiments investigated the impact of a greedy (vs. fair) context and social norm on people’s decisions in the Dictator Game (DG). In the DG, a person determines a split of a hypothetical amount of money between him/herself and a (faked) responder. The responder simply receives the remainder of the amount not allocated by the participant to him- or herself. The responder’s role is entirely passive, and so the allocator has the full power to decide how much to give away. We perceive the level of greed as the amount of money the participants keep for themselves: the more they keep, the greedier they behave. Put differently, the more money the participants give away, the fairer their decision. From an operational point of view, this means that we perceive greediness as the opposite of fairness. We will clarify these constructs in the theoretical background section. In each experiment, students from the VU Amsterdam took part in June 2009. The collective results of the two studies suggest that (a) a greedy social norm can foster greedy behavior depending on the framing of the norm, (b) people become increasingly greedy when higher amounts of money are involved, and (c) greediness depends on a person’s stable personality traits. In the subsequent, we will touch upon relevant literature to assist our predictions, starting with a definition of greed, followed by some theories closely related to this concept. Describing Game theory in general, and the Ultimatum-, Dictator- and Delta Game in particular, we aim to clarify the presence of the conflicting motives of fairness and self-interest in human behavior. This section, in turn, introduces a description of the adaptive function of greed and fairness. To clarify our prediction that people’s environment may well influence their greediness, we introduce the concept of ‘framing -5-.

(7) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. effects’, contexts, and social norms. In addition to a description of these ‘situational factors’, our theoretical background contains an explanation of the potential influence of ‘individual factors’ on greediness, a person’s so called Social Value Orientation (SVO). The theoretical section ends with some additional factors that may or may not influence the results of our studies. After the theoretical background, we present our methodology. In this section we present our hypotheses and visualize them in a figure. Furthermore we introduce our two experiments, in which we study the influence of participants’ SVO, context and social norm, and amount of money played for on their greediness. In the following section the descriptive statistics and results are presented, using both an ANOVA and regression to analyze the data. In the final section, the general discussion, the results are discussed in light of relevant literature. Also, there is referred to limitations and suggestions for future research.. -6-.

(8) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 2. THEORETICAL BACKGROU D 2.1 A DEFI ITIO OF GREED Greed has been described as an excessive desire for acquiring or wanting more than one needs (Kaplan, 1991). It relates to a process of acquiring or wanting possessions with a disregard for the interests of other. Closely related to the construct of greed is the construct of self-interest. A selfinterested attitude is usually defined as one that is instrumental to the individual’s attainment of valued goals (Sears, Lau, Tyler, & Harris, 1980). For the present research, self-interest is defined to stress the egocentric and material determinants of human behavior: it is viewed as the goal to maximize material well-being. Excluded, therefore, are such nonmaterial goals as spiritual well-being, moral rectitude, prestige or status, or altruism2 (Sears, et all., 1980). Greed is an emotion that may follow directly from self-interest. Emotions can be described as acute, relatively momentary, object-based experiences of goal relevance, experienced to resolve a present state (Frijda, 1986). Greed thus refers to a momentary feeling or behavior specifically aimed at obtaining possessions, while self-interest refers to the general motive to obtain one’s goal(s), Hence, greed can be seen as potentially resulting from self-interest for as far as an individual’s goal is to increasingly acquire possessions. The constructs of self-interest and greed thus have great overlap, but cannot be substituted regardless of the situation.. 2.2 GAME THEORY: FAIR ESS VERSUS SELF-I TEREST The question of what motivates people in social dilemma situations has been the subject of an ongoing debate between (social) psychologists and economists. The debate has concentrated on the issue of whether people are mainly driven by self-interest, or whether they are driven by alternative fairness concerns (Gilliland, et all., 2005). Fairness can be perceived in different ways depending on situational factors, but in its most simple form it refers to a fair or proportional division of resources3. Fairness in. 2. Altruism is unselfish concern for the welfare of others. It can be distinguished from feelings of loyalty and duty. Duty focuses on a moral obligation towards a specific individual or organization, while pure altruism is the motivation to help others or to give without wanting a reward or recognition in return. 3. For a recent description of the fairness theory, which elaborates on the determinants of fair behavior, see Folger and Cropanzano, 2001.. -7-.

(9) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. organizations has been linked to important organizational outcomes, including organizational commitment, participation, cooperation, turnover and extra-role behaviors (Colquitt, Conlon, Wesson, Porter, & Ng, 2001; Schminke, Ambrose, & Cropanzano, 2000). Gaining an understanding of the activation of fairness in people, involves an examination of the typical situations in which fairness versus self-interest dominate. Classical economists are defenders of the efficient market hypothesis, stating that free markets can regulate itself, with economic agents making rational decisions. The basic idea of rational choice theory is that patterns of behavior in societies reflect the choices made by individuals as they try to maximize their benefits and minimize their costs. The concept of bounded rationality modifies this assumption to account for the fact that perfectly rational decisions are often not feasible in practice due to the finite computational resources available for making them. Whether or not perfectly rational decisions are feasible in real life, many economic models are based on the idea that people have the intention to further their self-interest. The question of whether people are primarily motivated to further their own interest or whether they are primarily concerned about fairness has stimulated much research. An important field for studying these differential motives, named Game Theory, came into being with the book Theory of Games and Economic Behavior by Neumann and Morgenstern (1944). Game theory is about what happens when people - or genes, or nations - interact (Camerer, 2003). Camerer (2003) points at the importance of distinguishing games from game theory. Games, he argues, are a presentation of strategic situations in which a person must anticipate what others will do and what others will conclude from the person's own actions. Hence, games in itself do not tell us anything about human behavior. Game theory, on the other hand, is a mathematical derivation of what players with different cognitive capabilities are likely to do in games. As a matter of fact, game theory is mainly derived from expectations about people’s behavior in games. Behavioral game theory, in contrast, is about what players actually do. It expands game theory by adding the influence of emotions, mistakes, limited foresight, and doubts about how smart others are (see Camerer, 2003; Camerer, 1997; Rabin,. -8-.

(10) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 1993). Behavioral game theory is one branch of behavioral economics, an approach to economics which uses psychological theories (see Camerer and Loewenstein, 2003).. 2.2.1. THE ULTIMATUM GAME: THE ROLE OF SELF-I TEREST. An important tool to investigate the role of self-interest in human behavior is the ultimatum game (UG), a game developed by Güth, Schmittberger, and Schwarze (1982). In the UG, two players have to decide on how to distribute a certain amount of money. One of the players, the allocator, offers a proportion of the money to the other player, the responder. If the responder accepts, the money will be distributed in agreement with the allocator’s offer. If the responder rejects the offer, both players get nothing. Note that the offer can be interpreted in terms of greediness vs. fairness: it illustrates momentary, object-based behavior, in which an individual considers his/her own material welfare related to that of the other, though conditional on the allocators perception of the reaction of the responder. In the present research, we view greed as such: it reflects the amount of money people keep for themselves instead of sharing it with another person. Fairness is seen as the opposite of greed, and reflects the amount of money people allocate to the other. In research concerning the GreedEfficiency-Fairness hypothesis (Wilke, 1991)4, greed is also defined as such: it reflects how much people want to take from a resource for themselves while leaving less (or nothing) for others. Important to our definition of greediness and fairness is that we treat these behaviors in relative terms: when some people allocate 20% of their money to the responder while others give away 30%, the former group acts relatively greedier than the later, or, in other words: the later group acts fairer than the former. In the present research, we do not give a value judgment about what is greedy or fair in absolute terms. One could argue that giving 20% of your money to another person is greedy or fair, based on different arguments, but we do not study behavior as such. When we discuss and interpret findings about greed and fairness, we aim at describing behavior in relative terms. 4. We won’t go into detail about this theory as it relates to decisions in resource dilemmas with more than one independent others, which includes situational factors not elaborated on in the present research. For the interested reader, see Wilke (1991) and Eek & Biel (2003).. -9-.

(11) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. If people are only motivated to maximize their own outcomes, allocators in the UG should offer the responders the smallest amount possible greater than zero and responders should accept this offer. After all, if responders only care about their own outcomes they should accept even the smallest positive offer because doing so yields them higher outcomes than the alternative of rejecting the offer and receiving nothing. These expectations are not in line with actual findings. In student populations, modal offers in the UG are almost always 50%, and mean offers are between 40% and 45%. Responders reject offers of 20% about half the time (Sanfey et al. 2003). As a comparison, Henrich et al investigated UG offers within 15 small scale Asian, African and American societies, and found that mean offers ranged from 26% to 58%, both below and above the “typical” student behavior. Similarly as in western societies, the 50/50 offer was clearly most popular in many groups. On the responder side of the UG, rejection rates were quite variable. In some groups, rejections were extremely rare, even in the presence of low offers, but in others the rejection rates were substantial and included frequent rejections of offers above 50%. These studies, although presenting various results, indicate that allocators generally propose an equal distribution of the money, and that responders do not accept low offers. In the context of the UG, there can be two explanations for such findings: People are motivated by fairness, or their generous offers are a result of the fear of rejection. The latter would mean that it is in one’s own selfinterest to offer an equal split if one fears that the responder will reject low offers (Gilliland et al., 2005). Because of these different explanations for people’s behavior, results from the UG are somewhat difficult to interpret. An effective approach to understand the role of greed in such situations is to study the role of power. Emerson (1972) defined power in terms of dependence. For the UG, the question arises whether the dependence relation between allocator and responder affects the offers that allocators make, suggesting that the more power allocators have, the more they will behave in their own selfinterest (Suleiman, 1996). In his experimental study, Suleiman (1996) provides support for this notion by designing and utilizing another modified version of the UG known as the delta game. In the delta game, rejection of the offer means that the offer is multiplied with a factor delta. Thus, for delta 0, the - 10 -.

(12) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. delta game is identical to the standard UG (i.e., if the responder rejects, the responder and the allocator both end up with nothing). It is apparent that with higher values of delta, the responder becomes less powerful. For example, in the case of delta 0.9, rejection means that the offer is multiplied by 0.9, which means that both parties still get 90% of the offer after rejection. It is apparent that in that situation, the power of the responder is quite small. On the other hand, in the case of delta 0.1, rejection means that the offer is multiplied by 0,1, which means that both parties get 10% of the offer after rejection. In this case, the power of the responder is high. Suleiman (1996) demonstrates that offers tend to go down as delta increases, which means that offers go down as the allocator gets more power. This is in agreement with the notion that positive offers may reflect fear of rejection. If there is less to fear, offers go down (van Dijk, De Cremer, and Handgraaf, 2003). These findings suggest that as the power shifts more to the allocator, the responder is more likely to be taken advantage of. Allocators in the typical UG presumably are less concerned with truly being fair than with appearing fair: Self-interest dominates (Gilliland et al., 2005).. 2.2.2. THE DICTATOR GAME: THE ROLE OF FAIR ESS. Fear of rejection cannot explain findings observed in another type of game: the dictator game (DG). In contrast to the UG, the responder in the DG is absolutely powerless. That is, the allocator decides how much money will be distributed, and the responder can only accept the offer. Hence, this game is identical to a delta game in which delta is 1. Note that in such games, positive offers cannot be explained on the basis of a fear of rejection. The allocator’s offer therefore reflects what he/she is willing to share without the influence of fear. The DG has been used to test the rational choice theory: if individuals were only concerned with their own economic well being, participants would allocate the entire good to themselves and give nothing to the responder. Experimental results have indicated that individuals often allocate money to the responders, reducing the amount of money they receive. Henrich et al. (2005) extensively reviewed literature concerning the DG and found that mean offers in student populations usually fall in the 20% to 30% range. Additionally, they researched decisions in dictator games in three small-scale African and Southern American societies, Orma, - 11 -.

(13) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. Hadza, and Tsimane, and found that mean offers were 31, 20, and 32 percent for these societies respectively, which suggests comparable behavior as in student populations. Similarly, Camerer (2003) described data from a plethora of DG which established that usually more than 60 percent of subjects pass a positive amount of money to responders, and that the mean transfer is roughly 20% of the endowment. Literature on delta games also offers interesting findings. In a conceptual replication of the Suleiman study, with deltas of 0, 0.1, 0.9, and 1, Handgraaf, Van Dijk, Wilke, and Vermunt (2003) found that as delta increases from 0 to 0.1 to 0.9, offers go down. However, this pattern reversed itself when delta went from .9 to 1.0: Offers were higher in the case of delta = 1 than in the case of delta = 0.9. These findings seem to indicate that as long as the responder has some power, even if that power is somewhat small (as is the case when delta = 0.9), allocators engage in self-serving behavior, but when a responder is completely powerless, fairness dominates (Gilliland et al., 2005). In the DG, Gilliland argues, people apparently define the situation as a helping situation in which it is their responsibility to care for the other. Later on we elaborate on these findings, and state that contexts and social norms might also (partly) explain these results. Charness and Gneezy (2008) compared the UG with the DG by examining whether a factor expected to influence fairness would influence results in these games in the same way. More specifically, they compared the regular procedure of playing the DG and the UG with the same games played by participants who knew the family name of the responders. When these names were revealed, dictators allocated a significantly larger portion of money to the responder. However, this information had no significant effect on the offers in the UG. It appeared that in the later game, strategic considerations crowd out impulses toward fairness, while in the former, fairness concerns could well be in place. The DG, by itself, does not activate strategic behavior, which makes it an interesting tool to investigate factors that potentially influence fair behavior. For that reason, we use decisions in the DG in as our dependent measure.. - 12 -.

(14) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 2.3 THE ADAPTIVE FU CTIO OF GREED A D FAIR ESS Reviewing the extant literature on game theory, it becomes clear that some situational characteristics swing the balance to greedy behavior, and some to fairness motives. In the DG, people are generally found to act relatively fair, potentially as a result of feeling responsible for the other. Offers are, on the other hand, barely found to be completely fair. The motive of self-interest, with as a result greedy behavior, apparently is an important one. We assume that greed developed as a consequence of adaptation, such that this specific emotion emerged and persists because it has functional value, and accordingly became habitual over the course of human interaction. It is, then, believed to be a result of evolution5. As greed results from the motive of self-interest, it is useful to examine self-interest in light of evolutionary theory. Selfinterest is one perennial source of conflict between nature and culture (Baumeister, 2005). Evolution, Baumeister argues, almost inevitably makes each organism do what is best for itself, with the main exception involving possible willingness to make some sacrifices for kin. Greedy behavior is a direct consequence of self-interest. People who are greedy (try to) make sure that they obtain enough food, money and possessions. If we assume, for the moment, that that has been a prominent interest for human beings, than greed is most likely evolved as a result of evolution. In this line of thinking, some people argue that without greed, humanity would not have progressed to where we are now. The 1980s were often described as “the greedy decade”. One of the most quoted apologists of the period is Gordon Gekko, antihero of the movie Wall Street (1987):. Greed – for lack of a better word – is good. Greed is right. Greed works. Greed clarifies, cuts through, it captures the essence of the evolutionary spirit. Greed in all of its forms: Greed for life, for money, for love, knowledge, has marked the upward surge of mankind, and greed – you mark my words – will not only save Teldar paper, but that other malfunctioning corporation called the USA.. 5. For a thorough description of evolutionary theory, see the book ‘the structure of evolutionary theory’ by Gould (2002), with a persuasive interpretation of evolutionary ideas, a book most revered to in the field of evolutionary theory.. - 13 -.

(15) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. In 1996 a Harris poll found that 61 percent of Americans believed Wall Street is “dominated by greed” and yet 70 percent of them also agreed upon the statement that “Wall Street benefits America.” It is found, however, apart from game theory, that human interaction is also strongly shaped by fairness motives, that is, a concern for the welfare of others. Individuals’ fair behavior is even found regarding total strangers (Fehr, Bernhard & Rockenbach, 2008). Fehr et al. (2008) show that young children’s fairness concerns assume a particular form, inequality aversion that develops strongly between the ages of 3 and 8. Most children at age 7–8 prefer resource allocations that remove advantageous or disadvantageous inequality. The results suggest that fairness preferences in human have deep developmental roots. On the assumption that self-interest forms the basis of (human) evolution, existing fairness in organisms has been a complexity for evolutionary theorists. An exploration of how these drives may have evolved in an asocial world is described in the article ‘The evolution of cooperation’ by Axelrod and Hamilton (1981). These authors made the assumption that interactions between pairs of individuals occur on a probabilistic basis, and developed a model which showed how cooperation based on reciprocity can get started in an asocial world, can grow while interacting with a wide range of other strategies, and can resist invasion once fully established. This process is expected to be the basis for the development of fairness concerns in human beings. The important role of fairness in human evolutionary history raises the possibility that there may have been cultural or even genetic transmission that favors these behaviors. Recent evidence from behavioral genetics suggests for example that fairness in the UG has a genetic component (Fehr et al., 2008). In the present research, then, we recognize that both self interested and fairness preferences drive human behavior. Four factors that potentially influence these opposing preferences are contexts, socials norms, social value orientations, and the amount of money. The former two will be introduced by explaining the existence of framing effects.. - 14 -.

(16) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 2.4 THE FRAMI G EFFECT As we saw from observations in dictator games, simple self-interested motives are not all there is to be said about human behavior. Although the results in DG are used to provide evidence for fairness motives in individuals, two recent studies put light on the role of the so called framing effect on decisions in dictator games. The framing effect refers to different choices made by individuals if the same situation is described to them differently. People who show this kind of reversal (as many do) are violating what Kahneman and Tversky (1984) call the principle of invariance. The invariance principle asserts that one’s choices ought to depend on the situation itself, not on the way it is described. In other words, when we can recognize two descriptions of a situation as equivalent, we ought to make the same choices for both descriptions (Baron, 2008). Violations of the invariance principle are also called framing effects, because the choice made is dependent on how the situation is presented, or “framed.” Research by Bardsley (2008) shows that subjects’ fairness in dictator games can be reversed by allowing them to take a partner’s money6. In the original DG, subjects are given the option to allocate positive amounts of money (or zero) to a responder, while in the so called taking game, people are allowed to choose negative amounts as well (which means one takes money from the responder). Bardsley (2008) found that, as soon as the choice set introduced taking, which in fact could (and should) lead to the same result as the original DG, participants’ decisions became less fair. Based on these findings, Bardsley argues that DG giving does not reveal concern for consequences to others existing independently of the environment, as posited in rational choice theory. It may instead be an artifact of experimentation. Participants might have felt that the social norm in the DG was giving, since they could either do nothing or give, whilst the taking game could have communicated the opposite: people were allowed to give negative amounts of money, which might have led them to do 6. Three experiments were conducted, with two conditions in each. One condition was the original dictator game in which people could allocate positive amounts of money. The other condition was the “taking game”, in which participants could allocate positive as well as negative amounts of money. Note that as in the first game people generally give positive amounts, the two games should not differ in results. The three experiments show similar indications of inconsistency between the conditions, which indicates that only the framing of the game influenced results. In experiment 1 the difference between the conditions in fair behavior is significant at the 5% level, in experiment 2 at the 10% level, and in experiment 3 at the 1% level.. - 15 -.

(17) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. so. Another research, by List (2007), also indicated that significantly fewer subjects were willing to transfer money to a responder when the action set included taking.7 He argued that if behavior in the DG is due to social goals per se, then simply manipulating the choice set should have no influence on outcomes. His conclusion was that each way of framing articulated another social norm: giving versus taking. Baron (2008) uses a broad definition of rational thinking, and refers to it as whatever kind of thinking best helps people achieve their goals. Viewing rationality as such, we can see that the previously described findings about people’s decisions within dictator- and taking games do not reflect rational thinking. This broad definition of rationality would not be violated if people allocate money to a responder, for example because their goal is to be fair. Decisions in dictator games can be viewed as irrational, however, if another way of framing (e.g. including taking in the choice set) leads people to make different decisions. After all, the same goal cannot be reached in two similar situations, if another decision is made in each of these situations. As we do find this framing effect in the DG, behavior is apparently not exclusively linked to individuals’ goals but also to the properties of the situation. Of our interest is how contexts and social norms can frame the same situation differently, and how this framing can lead to irrationality as defined by Baron (2008).. 2.5 CO TEXTS A D SOCIAL ORMS An interesting starting point to approach the potential influence of contexts and social norms on greedy behavior is Baumeister’s. (2005) description of culture, stating that this factor requires. individuals to restrain their self-interest and to act in ways that are best for the group. Selfish individuals, he argues, will not want to pay taxes, wait their turn, risk their lives in war, respect others’ ownership of things they want, and the like, but culture demands that they do so. We propose that culture does this by means of contexts and social norms. Social norms can be defined as shared 7. List (2007) reviewed evidence from nearly 200 dictators in treatments that varied the action set and the origin of endowment (earned vs. unearned). Additionally, he conducted a study himself by comparing the DG with 3 varying taking games. Participants gave significantly less money when taking was included in the choice set, and this even decreased when more taking was allowed.. - 16 -.

(18) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. perceptions of appropriate behavior that possess the power to induce people to act publicly in ways that deviate from their private inclinations (Miller & Prentice, 1996). Via social norms, individuals’ thoughts or actions can be affected by other people. The extant literature refers to this process as social influence. The theory of social influence states that behavior is intentionally or unintentionally influenced by others, which can occur as a result of conformity, compliance, or authority. Of relevance to the present research, conformity involves changing one’s behavior to match the actions of others, to fit in with those around us. We use the actions of these others as a means of social validation, as an interpersonal way to locate and validate the correct choice (Festinger, 1954). Because the desire to choose correctly is powerful, the tendency to follow the crowd is both strong and widespread. Conformity can be an effective and timesaving strategy. Group consensus is typically the most direct route to goal attainment (Festiger, 1950). Moreover, consensus provides an easy heuristic about how to act, because consensus implies correctness (Cialdini, 1993). As an example of how powerful a social norm can be, Miller (1999) argues that the theory of self-interest has spawned a norm of self-interest. He proposes that a norm exists in Western cultures that specifies self-interest both is and ought to be a powerful determinant of behavior. This norm influences people’s actions and opinions as well as the accounts they give for their actions and opinions. The consequence is that people often act and speak in accordance with their perceived selfinterest solely because they believe to do otherwise is to violate a powerful descriptive and prescriptive expectation. In particular, it leads people to act and speak as though they care more about their material self-interest than they do. Accordingly, greedy behavior could be a result of a norm of self-interest. As a support for the idea that a norm of self-interest could lead to more greedy behavior, the specific question addressed by Frank et al. (1993) was this: Does exposing college students to the precepts and findings of rational choice theory influence the power they perceive self-interest has, or at least should have, over their own lives and that of the average other? The researchers examined this question by assessing students’ responses at both the beginning and end of the semester to two ethical dilemmas (“Would you return a lost envelope with $100 in it?” and “Would you report a billing error that benefited you?”). Students were members of a microeconomics class or of a class unrelated to - 17 -.

(19) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. economics (astronomy). The former was taught by an instructor who specialized in game theory. The results supported the hypothesis that studying economics can foster greedy motives. The most striking finding was that the economy students believed that not reporting a favorable billing error is the rational and appropriate action to take, however guilty one feels doing so. In other words, following the economics class made people believe that guilt or honesty were not factors that ought to drive human behavior. This result was not found for the astronomy students. Referring back to game theory, we could view socials norms in light of the framing effect. If we compare for example the findings of the DG and taking game, and assume socials norms to drive the difference between these two, than we can see how a different way of framing causes individuals to move at the continuum between greedy and fair behavior. The same is true for the previously described students: if one class causes them to change their behavior towards greediness, than the framing of the situation (economics- vs. astronomy class) apparently changes their behavior, not social goals (e.g. acting fair) per se. In line with these findings, we propose that a norm of greed induces people to act in ways that maximize their material interests. Our first hypothesis holds that people will show more greedy behavior if a norm of greed is made salient, while people will show more fairness if a norm of fairness is made salient. We recognize that an individual’s context could also influence behavior. We describe an individual’s context is being formed by the society’s institutional and organizational environment, as for example its material atmosphere, institutions, laws, and government. Several researchers argue that the image of humans as being self-interested leads to the creation of the kinds of social institutions (e.g. workplaces, schools and governments) that transform the image into reality (see Lerner, 1982; Schwartz, 1997). Baumeister (2005) explains that the cultural system, via social norms and law, dictates the desired means of fair behavior. According to him, law and institutions are especially helpful at regulating interactions among strangers instead of familiar people. Based on the same assumption, we expect that a greedy (vs. fair) context has an influence on human behavior. More specifically, our second hypothesis holds that people will show more greedy behavior if a context of greed is made salient, while people will show more fairness if a context of fairness is made salient. - 18 -.

(20) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 2.6 PERSO ALITY DIFFERE CES Social Value Orientation (SVO) is a theory of choice behavior in game situations advanced by David Messick and Charles McClintock in 1968. Contrary to the rational choice theory which assumes individuals to make choices to maximize their own payoffs, social value orientations consider personality differences across individuals which leads to a range of preferences for one’s own wellbeing and the well-being of others. Individuals can be classified into two broad categories: pro-social and pro-self. Pro-socials are characterized by having greater tendencies to enhance both joint outcomes and equality in outcomes (Van Lange, 1999). Pro-selfs, on the other hand, desire to maximize own welfare relative to or with no concern of that of the other. These orientations are found to be independent on gender. As SVO is considered to be a stable psychological disposition, we expect it to influence the game behavior of participants. Differences among pro-social and pro-self are found to be strongly related to behavior in game theory (Kelley et al, 2003). Moreover, such findings extend to behavior outside of the laboratory. For example, relative to pro-selfs, pro-socials are more prone to help others, and to make donations to noble causes. Furthermore, roommates and friends rate prosocials and pro-selfs differently in terms of “what they are like” (Bem & Lord, 1979). Such evidence indicates that the orientations are relevant to our understanding of patterns of interaction in many situations. As pro-social orientation (vs. pro-self) is found to be associated with greater tendencies to enhance both joint outcomes and equality in outcomes (Van Lange, 1999), our third hypothesis holds that in general, pro-socials (vs. pro-selfs) will act more fair (vs. greedy) than pro-selfs. It is found that pro-socials are more likely to act as fair as the interdependent other does, to act as fair as they anticipated from the interdependent other, and to find equality in outcomes (Van Lange, 1999). In other words, pro-socials are more sensitive to the social world surrounding them. Presumably, they are more influenced by a context and social norm that signals what is perceived to be fair or normal. Pro-selfs, on the other hand, desire to maximize own welfare relative to or with no concern of that of the other. They care less about equality. Most likely, they are more stiff in their decision to choose for themselves and less influenced by whatever context or social norm they are confronted with. Based on this knowledge, we propose that pro-selfs will be less sensitive to a context - 19 -.

(21) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. and social norm than pro-socials. Our fourth hypothesis therefore holds that there will be an interaction between SVO and context/social norm, such that the level of fairness for pro-socials increases when they face a fair context/social norm and decreases when they face a greedy context/social norm, while for pro-selfs the level of fairness in these two conditions will be quite rigid.. 2.7 AMOU T OF MO EY Research concerning dictator games has not concentrated on the influence of the amount of money to be allocated. In other words, we do not know if people make different decisions if the amount of money that they play for in the DG is adjusted substantially. We expect, however, that people will be less willing to share money with an unknown other if the amount played for is considerably high compared to when it is lower. When subjects play for small amounts of money in which there is little to lose, we expect that the goal to act relatively fair can be quite an important one. When substantial amounts of money are involved, however, our prediction is that people weigh the importance of the money they can earn more than the importance to act fair. In other words, the more money is to be allocated, the more we believe that the drive to earn money dominates the drive to behave in a (relatively) fair way. To get greater insights in the influence of the amount of money to be allocated, participants will have to play five DG, each for different amounts of money. Our fifth hypothesis holds that people will, in relative terms, act greedier when higher amounts of money are involved compared to when lower amounts of money are involved.. 2.8 OTHER IMPORTA T FACTORS In addition to individuals’ personality and (social) environment, there may be other factors that influence their level of greediness within the DG. These factors, which all refer to their presence within the DG, are participants’: payment, anonymity, gender, culture, wealth, and education. Subsequently these factors will be described, analyzing their level of relevance for the present research.. - 20 -.

(22) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. 2.8.1. FEMKE JONGERIUS, 2010. PAYME T. In most studies using games to investigate behavior, participants know how their choices and the choices of other subjects combine to determine monetary payoffs. Participants are actually rewarded based on their performance because in game theory, researchers are interested in extrapolating the results to naturally occurring games in which players have substantial financial incentives (Camerer, 2003). Economists argue that asking people what they would do is less useful than observing what people actually do (Baron, 2008). Thaler (1986), on the other hand, suggests that there is little evidence of this. Most studies that compare hypothetical and real choices that involve money typically find only small differences, while the results point in the same direction (Beattie and Loomes, 1997; Camerer, 1995; Irwin et al., 1992). Forsythe, Horowitz, Savin, & Sefton (1994) investigated the importance of actual payments in DG and found that offers in the DG were significantly higher in the without-pay-condition than the with-pay-condition. Apparently, payment did matter. Because we are interested in people’s behavior in situations in which they do have a financial incentive, we chose to link participant’s decision making to actual payment.. 2.8.2. A O YMITY. Hoffman, McCabe, and Smith (1996) investigated the influence of perceived anonymity by the allocator in DG decisions, suggesting that decisions experienced as incompletely anonymous would affect participants’ degree of social distance from the experimenter and thereby expectations of reciprocity8. According to them, social norms start to play a role the moment a subject does not experience complete anonymity, leading to deviations in actual findings in the DG from game theoretic predictions. Hoffman et all (1996) found that as they weakened the anonymity with regard to 8. Reciprocity means that in response to friendly actions, people are frequently much nicer and much more cooperative than predicted by self-interest models. Conversely, in response to hostile actions, they are frequently much more nasty and even brutal. Reciprocity is fundamentally different from altruism. Altruism is a form of unconditional kindness, that is, altruism given does not emerge as a response to altruism received. Reciprocity is an in-kind response to beneficial or harmful acts (Fehr and Gachter, 2000). People can anticipate on future reciprocity, and therefore act friendly in order to receive friendly acts in return.. - 21 -.

(23) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. the experimenter, the offer distributions decreased significantly, rejecting the null hypothesis that the distributions of offers are the same across conditions with different levels of anonymity.9 Apparently, social distance regarding the experimenter is one way in which social norms can influence behavior. We are, however, interested in the influence of contexts and social norms independently from expectations by others. We investigate social influence on people’s decisions in DG when decisions are made anonymous. If we find the expected results, this would add to literature that even if others do not know about their decisions, people can still be socially influenced by their social environment. To make sure that our findings can be attributed to a context and social norm experienced privately, we will control for anonymity, such that all participants will feel completely anonymous. In doing so, we certify that results are not influenced by subjects’ expectations of reciprocity or desire to ‘be a good participant’.. 2.8.3. GE DER. Results from previous studies have led many researchers to conclude that gender has no effect on greed in social dilemmas. Repeated results are that gender effects are nonexistent, or are inconsistent, or weak, or both (Camerer, 2003). On the other hand, Fortin (2006) used two single-cohort longitudinal surveys to investigate the impact of greed, ambition, leadership, altruism, gender role attitudes, family values and income expectations on the gender wage gap. She found that women tend to hold more altruistic values, while men tend to be more ambitious and value money more. The most significant difference that she found between men and women was a difference in favor of men in the importance of “Making a lot of money”, a difference that speaks to the issue of greediness. In addition, the percentage of men who never state that “Having lots of money” is very important was 53.2 percent while the corresponding percentage of women was 70 percent. The results indicate that greed and factors closely related to greed are much more present in men than in women. Results of a. 9. They conducted 6 experiments with offers in the DG as dependent measure, each differing in degree of anonymity from complete- to little anonymity. Their hypothesis was that more anonymity would lead to smaller offers, against the null hypothesis that offers would be identical. For detailed descriptions about the method and results, see Hoffman, McCabe, and Smith (1996).. - 22 -.

(24) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. study by Simpson (2003) investigating the prisoner’s dilemma, suggests that males respond more strongly to greed in social dilemmas than women. Kuwabara (2005) replicated Simpson’s study and found similar results. He added to his conclusion that the results should be understood in relative terms: men and women both respond to greed - only, to different degrees. Fairness was never complete or completely absent for either men or women, but varied systematically across games. Based on these gender differences concerning greed, we include gender as a control variable to investigate whether men do indeed make more greedy decisions than women.. 2.8.4. CULTURE. The research by Henrich et al. (2005) is especially useful for the analysis of potential variables that need (not) to be controlled for in game theory. Their method provides us for example with much insides into cultural differences in game behavior, as they researched 15 small-scale societies which were compared with Western student populations. Prior work comparing UG behavior among university students from Pittsburgh, Ljubljana (Slovenia), Jerusalem, Tokyo (Roth et al. 1991), and Yogyakarta (Indonesia; Cameron 1999) revealed little group variation (Henrich et al., 2005). In contrast, the UG results from the 15 small-scale societies show substantial variation, as described before in the section about the UG. In each of the three small scale societies in which they analyzed decisions in DG, they found that few or none of the subjects in these societies offered zero, whereas the modal offer among university students is typically zero (Camerer, 2003). We assume that offers in DG and other games are indeed heavily dependent on culture, and our research will therefore be concentrated on exclusively Dutch students, recognizing that results could be different when conducted in other societies. We do believe, however, that the findings can be generalized to populations in other industrialized countries. The same thing counts for Social Value Orientations: although the proportion of pro-self and pro-socials might differ among various cultures, it does not influence the results. This is true because we will control for SVO.. - 23 -.

(25) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. 2.8.5. FEMKE JONGERIUS, 2010. WEALTH. In all of the 24 experimental games (15 UG, 6 public good games, and 3 DG) that Henrich et al. (2005) conducted, nothing they measured about individuals other than their group membership (society, village, or camp) predicted experimental behavior. Wealth did not generally account for any variation in game play. Theoretically we could evaluate this outcome in light of the prospect theory10. In 1979, psychologists Daniel Kahneman and Amos Tversky proposed this theory of decision making that accounted for almost all of the available data concerning decisions under risk. It has inspired many other similar attempts. Most aspects of the theory are irrelevant here as it describes people’s behavior under risk, but interesting is their interpretation of the utility of money. They suppose that people evaluate the utility of a gain or loss by itself, essentially without regard to their total wealth. They thus propose that people’s monetary decisions are independent of their wealth. Referring to this theory and the evidence that Henrich et al. (2005) found for the unimportance of people’s wealth in game behavior, we do not control for wealth in the present research.. 2.8.6. EDUCATIO. Several researchers also analyzed the influence of formal education on game behavior. Analyzing UG data from the Sangu, Orma, Mapuche, Au, and Gnau, Henrich et al. (2005) found that the level of education did not account for any significant share of the variation in offers. They conclude that, although education effects may exist, they are neither particularly strong nor consistent across games or societies. Though we propose that education does not have a noteworthy effect on results in game behavior, we did control for this factor as we only researched university students. We believe that the results could be generalized to people with other education, but we acknowledge that more research would be valuable to confirm this assumption.. 10. For the interested reader, see the book ‘thinking and deciding’ by Baron (2008), chapter 11 page 262, for a thorough and clear description of the prospect theory. For a comparison with the expected utility theory, read also chapter 10, page 233.. - 24 -.

(26) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 3. METHODOLOGY As stated before, we conducted two experiments using the DG to test our five hypotheses. Participants were asked to allocate a hypothetical amount of money to a (faked) responder. The hypotheses (H) are as follows: H I). People will allocate less money to the responder if the norm of greed is made salient, while people will allocate more money if the norm of fairness is made salient.. H II). People will allocate less money to the responder if the context of greed is made salient, while people will allocate more money to the responder if the context of fairness is made salient.. H III) Pro-socials are expected to allocate more money to the responder than pro-selfs. H IV) There will only be a significant difference between money allocated to the responder in the greedy context or social norm- condition compared to the fair context or social normcondition for pro-socials, while for pro-selfs there will be no such difference H V). People will, in relative terms, allocate less money to the responder when higher amounts of money can be allocated to the responder compared to when lower amounts of money can be allocated.. In figure I these hypotheses are visualized, together with the other factors that are expected to influence the results. Next we discuss how SVO, the context, and social norm will be measured or manipulated.. 3.1 SOCIAL VALUE ORIE TATIO. The Decomposed Game technique is an experimental instrument developed by social psychologists to assess one's social value orientation. The variant of this technique used for the present research asks subjects to choose between a series of nine trios of options. Each option corresponds to one of the most commonly observed value orientations: cooperative, individualistic, and competitive. An example of such a trio of options is as follows: (1) Option A: 480 points for self and 80 point for other; (2) Option B: 540 points for self and 280 points for other; and - 25 -.

(27) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. (3) Option C: 480 points for self and 480 points for other. In this example, option A represents the competitive choice (i.e., yielding greatest outcomes for self relative to the other); option B the individualistic choice (i.e., yielding greatest absolute outcomes for self), and option C the pro-social choice (i.e., yielding greatest joint outcomes and greatest equality in outcomes). If a subject selected six or more consistent choices, then his or her social value orientation could be identified. For the purpose of this research, cooperative individuals were labeled pro-socials, while both individualistic and competitive individuals were labeled pro-selfs. This is a broadly used division as individualistic and competitive individuals both choose what is the best option for themselves. In research using this instrument, most individuals are classified as prosocial (about 60%) and a smaller amount as pro-selfs (40%).. 3.2 CO TEXT-MA IPULATIO. Priming participants with the greedy vs. fair context was simply done by varying the game’s name: Half of the participants had to play the Wall Street game, the other half the Community game. In reality, both games were exactly the same. This method was used by Liberman, Samuels and Ross (2004) who conducted two experiments to explore the predictive power of the stated “name of the game” (Wall Street Game vs. Community Game) in determining players’ response in the prisoner’s dilemma. The results of these studies showed that the name of the game influenced players’ choice to act fair. We use this paradigm to see if such a contextual manipulation also influences results in the DG, in which fear is not present (compared to the prisoner’s dilemma). The name of the game was presented at each page of the experiment in order to repeatedly remind participants.. 3.3 ORM-MA IPULATIO. For the Norm-manipulation, participants were either or not primed by greed as being a socially accepted norm. The manipulation was based on the similarity-attraction paradigm, predicting greater conformity to liked or similar others. More contemporary studies continue to find results in line with this paradigm. Abrams et al. (1990) found for example that psychology students who believed their - 26 -.

(28) Anonymity. Gender. Culture. Behavioural game theory. Theoretical backing. Fairness. Game theory. 27. Figure I. The theoretical model predicting the influence of Contexts, Social 0orms, height of money, Social Value Orientations and other factors on greedy versus fair behavior. Payment. Other factors. Research on pro-socials vs. pro-selfs. Theoretical backing. Social Value Orientations. Individual factors. Amount of money. Rational choice theory. Evolutionary theory. Greediness. Framing effects (e.g. ‘taking game’) + Social influence theory. +. Behavior. Theoretical backing. _. FEMKE JONGERIUS, 2010. Theoretical backing. Greedy contexts. Framing effects (e.g. ‘taking game’) + Social influence theory. Theoretical backing. Greedy social norms. Situational factors. THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR.

(29) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. performance was being evaluated by another psychology major conformed more than those who thought they were being evaluated by an ancient-history major. In the same line of reasoning, we created a greedy (vs. fair) norm by telling participants how their fellow students behaved. The participants were manipulated by showing them the following sentence: ‘In the game you are going to do next, 80% (20%) of the participants in this cubicle gave all or much money to themselves’. For each next game, this sentence was repeated. To make sure that the manipulation would seem reliable, the greedy (vs. fair) norm varied randomly per question, so that participants were shown the following percentages: 78/79/80/81/81 (18/19/20/21/22) (instead of 80% (20%) for each following question).. 3.4 PROCEDURE The experiment was conducted in the laboratory of the psychology faculty, starting with some general questions to be answered and the measurement of participant’s SVO. After these measurements, all participants were assigned to 5 DG. These games differed in amount of money to be allocated ($100, $1.000, $10.000, $100.000 and $1000.000), which were randomly presented to them. We counterbalanced between these amounts and the data were used to check whether behavior depended on the amount of money played for. The DG was applied to test greediness, and both the context- and norm condition were experimentally manipulated. To preserve anonymity, dictators were seated apart in different, closed cubicles to complete the dictator games at the computer. Their names were not asked and the experimenter, nor any other person, did enter the cubicle during the experiment. Optimal quietness was pursued as people were not allowed to talk loud in the experimental area, and as the cubicle doors were especially sound-proof. Regarding payment, participants were told the following: ‘In this task you will 5 times have to make a decision about different amounts of money. It is important that you act as if it’s real money, though it will not be transferred to you as such. Your decision about the division of money influences the amount of ‘money’ both you and the other will earn in the end. As told before, this money will not be transferred to you, but the more you get, the more chance you have to win a book coupon of €25,-. Note that the same thing counts for the other.’ 28.

(30) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. 4. DESCRIPTIVE STATISTICS A D RESULTS 4.1 EXPERIME T I 4.1.1. DESCRIPTIVE STATISTICS. A total of 80 students (30 men, 50 women) from the VU University Amsterdam took part in the study. They were randomly assigned to one of the four conditions of a 2 (Norm: Greedy vs. Fair) X 2 (Context: Greedy vs. Fair) between-participants design. For experiment I the final sample consisted of 77 participants (27 men, 50 women) with an average age of 20,9. In table I it is shown how the sample was divided over the various independent variables. Only for Social Value Orientation (SVO) the participants were not dispersed equally between groups: there were more pro-selfs (N = 48) than pro-socials (N = 29), 62% and 38% respectively, a finding inconsistent with the literature. Literature suggests these percentages to be the exact opposite. All participants together allocated on average 22.6 percent of the money to the responder, with a standard deviation of 2 indicating little variability. Recalling from previously described findings in DG that average percentages of offers in student populations fall in the range of 20% to 30%, our finding is consistent with literature. 10.4% of the participants gave nothing to the responder. A pre-test revealed that all participants understood the DG after the instruction, and a final question told us that none of the participants had any suspicion regarding our research question.. 4.1.2. RESULTS. To test our hypotheses, we conducted a mixed analysis of variance (ANOVA) with SVO (pro-social vs. pro-self), norm-condition (greedy vs. fair) and context-condition (greedy vs. fair) as betweenparticipant factors, and percentage allocated per amount of money played for ($100, $1.000, $10.000, $100.000 and $1000.000) as within-participants factor. We hypothesized that people would allocate less money to the responder if: (a) the norm of greed was made salient, (b) the context of greed was made salient, (c) they were pro-selfs, and 29.

(31) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. (d) higher amounts of money were to be allocated while people would allocate more money if: (a) the norm of fairness was made salient (b) the context of fairness was made salient, (c) they were pro-socials, and (d) lower amounts of money were to be allocated. Finally, we anticipated a significant interaction between both SVO & social norm, and SVO & context: we expect a significant difference between the money allocated to the responder in the greedy context/social norm condition compared to the fair context/social norm condition for pro-socials, while for pro-selfs we expect no such difference. Initial analyses were done with gender as a between-participant factor in the design, both for experiment I and experiment II. These analyses did not yield any significant differences for gender11 so we re-ran all of our analyses without this factor. An ANOVA revealed only one of the expected effects: a main effect of participant’s SVO on greediness. On average, pro-socials gave a higher percentage of their money away to their partners (M = 30.4012, SD = 3.10) than did pro-selfs (M = 14.70, SD = 2.40), F(1, 69) = 15.98; p < .001, pη2 = .19) (Table II). There was no significant effect of the context condition on greediness, neither of the norm-condition.. 11. Running the same analysis with gender included as a between-participant factor for experiment I revealed a non-significant result for the influence of gender on greediness: F(1, 61) = 1.50; p = .23. Gender as only independent variable neither generated a significant effect. 12. All the means and Standard deviations presented in this paper reflect, respectively, the average percentage of money allocated to the responder and its distribution in percentages.. 30.

(32) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. TABLE I. umber of people and percentage of money allocated to the responder per Independent variable (Experiment I) Money allocated a Independent variable (IV) Label Frequency Mean Standard deviation (SD) Social Value Orientation Pro-self 48 14.7 2.4 (SVO)b Pro- social 29 30.4 3.1 c Fair norm (20%) 37 22.0 2.9 Social norm condition Greedy norm (80%) 40 23.1 2.6 d Wallstreet 38 20.5 2.9 Context condition Community 39 24.6 2.7 a. Reflects the average percentage of money allocated to the responder in 5 dictator games (DG). The SD reflects its distribution. SVO is considered to be a stable psychological disposition, and it refers to individual’s behavior in game situations. People can be divided in two broad categories: pro-socials and pro-selfs. Pro-selfs desire to maximize own welfare relative to or with no concern of that of the other, while pro-socials are characterized by having greater tendencies to enhance equality in outcomes. c A greedy (fair) norm was created by showing participants the following sentence, preceding the DG: ‘In the game you are going to do next, 80% (20%) of the participants in this cubicle gave all or much money to themselves’ d Priming participants with the greedy vs. fair context was done by varying the game’s name: Half of the participants had to play the Wall Street game, the other half the Community game. In reality, both games were exactly the same. b. TABLE II Main effects and interactions (A OVA) (Experiment I) Independent variables (IV) F-value Significancea Partial Eta Squaredb Social Value Orientation (SVO)c 15.98 .00*** .19 Social norm conditiond Context conditione SVO x Social norm condition SVO x Context condition Social norm condition x Context condition SVO x Social norm condition x Context condition. .07 1.10 4.73 1.69 2.03 .27. a. .79 .30 .03** .20 .16. .00 .02 .06 .02 .03. .61. .00. Reflects the significance of the relationship between the IV and the amount of money allocated to the responder in 5 dictator games (DG). Reflects which percentage of the variance in amount of money allocated is explained by the IV that is not explained by one of the other variables in the model. c SVO is considered to be a stable psychological disposition, and it refers to individual’s behavior in game situations. People can be divided in two broad categories: pro-socials and pro-selfs. Pro-selfs desire to maximize own welfare relative to or with no concern of that of the other, while pro-socials are characterized by having greater tendencies to enhance equality in outcomes. d A greedy (fair) norm was created by showing participants the following sentence preceding the DG: ‘In the game you are going to do next, 80% (20%) of the participants in this cubicle gave all or much money to themselves’ e Priming participants with the greedy vs. fair context was done by varying the game’s name: Half of the participants had to play the Wall Street game, the other half the Community game. In reality, both games were exactly the same. f x reflects an interaction ***, **, * significance at respectively 1 percent, 5 percent, and 10 percent. b. 31.

(33) THE INFLUENCE OF A GREEDY CONTEXT AND SOCIAL NORM ON BEHAVIOR. FEMKE JONGERIUS, 2010. Table II reveals a significant effect for the interaction between SVO and the norm-condition, though not in the expected direction (F(1, 69) = 4.73; p = .03, pη2 = .06). Pro-socials shared more money than pro-selfs in both the greedy- and fair norm condition. However, pro-selfs allocated more money in the fair- than greedy norm condition (M = 18.50, SD = 3.30 vs. M = 11.00, SD = 3.40), while pro-socials allocated more money in the greedy- than fair norm condition (M = 35.20, SD = 4.00 vs. M = 25.60, SD = 4.80) (see Figure II).. Figure II. Average percentage of money allocated to the responder in Experiment I. Percentage allocated to the responder. 50 40. Fair norm. 30. Greedy norm. 20 10 0 Pro-self. Pro-social. Note. Here we can see that pro-selfs allocated more money in the fair- than the greedy norm condition, while pro-socials allocated more money in the greedy- than the fair norm condition. The difference between these two effects is significant.. A Repeated Measures ANOVA revealed that there is a significant difference in percentage of money allocated among the different amounts of money participants were able to allocate ($100, $1.000, $10.000, $100.000 and $1000.000) (F(4, 66) = 7.588; p < .001). It turns out that participants were decreasingly willing to give away money when it concerned larger amounts of money (M1000.000 = 16.90, SD = 2.20) than when it concerned smaller amounts of money (M100 = 26.2, SD = 2.1) (Table III). We did not find an effect for order, meaning there was no significant difference among the amounts given as a result of the moment (1 to 5) on which the game was played.. 32.

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