A while back, the NY Times had a piece about whether sharing is a worthwhile strategy in Darwinian terms. In the course of the article, they described a psychological experiment. It goes like this:
Subject John is given 1000 dollars, and is told he must share it with Mary. John can choose to keep ANY portion of the money at all, but he has to give Mary something. The catch is this: Mary has to agree to the terms. If Mary says “yes,” the money is divvied up. If Mary doesn’t agree to the terms, they both walk away with nothing.
That is, if John says, “I’ll take $950, and Mary can have 50 bucks,” Mary may decide (rationally), “Hey, 50 bucks is 50 bucks, and I’m better off taking 50 than going home empty-handed.” Or Mary may be angry, and say “That selfish SOB! To hell with him! I’ll walk away with nothing, just to spite him, rather than let him have 95%!”
Now, the results in lab tests show that, for the Marys of the world, resentment wins out over self-interest far more often than not. The stats show that very few Marys will settle for less than a third of the cut. An irrational sense of “fairness” seems to trump a rational sense of self-interest.
That is, most people prefer equal misery to unequal happiness.
To me, this is utterly ridiculous… but it also indicates why socialism never seems to die out. The bratty, tantrum-throwing child screaming “THAT’S NOT FAIR!!!” never completely leaves our psyches.
Interesting. It does seem silly on Mary’s part in the context of the lab experiment, but I think you could look at it another way.
From Mary’s perspective, although John has control of the money, he can’t “earn” any of it without her help. In that light, giving her a pittance is inequitable–she’s doing just as much to earn the money by giving her consent as he is by making her an offer. In the real world it doesn’t pay to let people screw you over like that too often.
It’s more like striking for a higher wage or benefits, in my opinion: “Yeah, you’re the big boss and you have control of the direction this company is taking, but you’re not going anywhere without workers.”
In this case, Mary is losing 50 bucks, but in real life, not letting people walk all over her would probably be a good strategy.
Interesting…but let’s not neglect John here. He could
A:Quite rationally offer $500, in which case he could be pretty much assured of walking away with $500 himself.
B:If he were feeling lucky push it to $300-200 and hope she takes it.
C:Offer $50, when it’s pretty unlikey she’d go for it (would he in her place?)
So who’s being irrational? John is potentially turning up a guaranteed $500.
Anyway I’m with cher. I don’t think Mary’s a bratty child. In a specific instance it might not make sense, but overall it’s a better strategy.
And John’s strategy of taking $950 is a good one. On the assumption he can force Mary to agree to it.
There is a huge literature on this in economics and biology. Axelrod and Hamilton’s “The Evolution of Reciprocal Altruism” is a well known starting point.
Imagine being known as a person who never gets angry and walks off, even if you are offered only a dollar out of the thousand. You would be easily exploitable in markets - anyone could reneg on any deal, and as long as it was costly to go to court, they could get away with it. The existence of a sense of fairness means that one can credibly commit to one’s actions over time, a signal that “I will not be ripped off”. So, far from being an indication of why “socialism will never die out”, this is a condition for the working of capitalism.
i saw this described in THE ECONOMIST last december, and i disagree with the economists’ concept of logic.
Mary has VETO POWER, in effect just as much power as John. i would not take less than $400. if John can decide to live without $600 then i can live without $400. it is a question of DESPERATION. i do not recall economists ever discussing how DESPERATE the person on one side of a deal is. i have seen them say that every deal is a WIN-WIN because both sides agree, but if one side can force the other into a desperate situation then they will agree to a BAD deal. we are dealing in POWER GAMES here and economists won’t admit it.
curious that it is a woman deciding to accept the offer or not. what if a woman was making the offer and a man was deciding whether to take it. change of EGO/DOMINANCE. LOL!