Weekend Economists Take a Chance and Call a Bluff July 26-28, 2013

[DemReadingDU]

28. Rich People Are Not the Same as You and Me. They Cheat More.

Be sure to watch the PBS video, Money on the Mind. Included, is an interesting segment about the game of Monopoly.


7/27/13 Yes, Virginia, Rich People Are Not the Same as You and Me. They Cheat More.

When middle class and low income people complain about the lousy ethics among what passes for our ruling classes, they usually shrug it off as jealousy, class warfare, and/or the sensationalism. Guess what? Conventional wisdom is right.

The video below from PBS (hat tip Scott) presents research by Dacher Keltner, Paul Piff, and other academics at UC Berkeley into absolute and relative poverty. They that found in a number of different setting that affluent individuals were more likely to cheat than less well off people, even over things like candy and points in a game of chance. Admittedly, which the plural of anecdote is not data, I’ve had the experience they depict in one of their experiments, that people in fancy cars more likely to enter pedestrian crosswalks when pedestrians are in them than other drivers. I was in Rockport, Maine, which if you’ve been there, is a tourist destination and has lots of pedestrian crosswalks on the major streets. I was about to step into one when an Audi came downhill, and I could see that the driver could clearly see me. But she zoomed through, close enough that I gave her rear bumper a good whack with my trusty shooting stick (if I has wanted to be vindictive, as opposed to just send a message, I could easily have broken her side mirror or dented the side of the car instead). She had the nerve to make a fast U-turn and come back to scream at me that she had been driving too fast to stop and who was I to hit her car? I told her she’d just confessed to her traffic violation in front of a witness (my brother) and allowed me to get her license plate number.

In addition, the researcher replicated the “better off is correlated with worse behavior” even in a game setting. When one participant was given advantages relative to another, they got ruder in subtle and sometimes overt ways.

That does not necessarily mean all rich people behave badly (in fact, I’m surprised at how much another stereotype holds true: that old money types make a point of being gracious, no matter what the status of the other person), but it does confirm the widespread perception that money and status go to some people’s heads. But even more interesting is that the publication of what ought to have been a not terribly controversial finding elicited a firestorm of criticism.

Floyd Norris of the New York Times wrote up new research on a related topic: that CEOs who engage in bad conduct, even speeding, are more likely to commit fraud. So Jon Corzine’s speeding (and resulting accident) could have served as an early warning to MF Global investors.

http://www.nakedcapitalism.com/2013/07/yes-virginia-rich-people-are-not-the-same-as-you-and-me-they-cheat-more.html



6/21/13 Money on the Mind
In a series of startling studies, psychologists at the University of California at Berkeley have found that "upper-class individuals behave more unethically than lower-class individuals." Ongoing research is trying to find out what it is about wealth — or lack of it — that makes people behave they way they do.

appx 9 minutes