I’ve been making my way through Ori and Rom Brafman’s Sway: The Irresistible Pull of Irrational Behavior. It’s the second leg of my Not Malcolm Gladwell trilogy (see here), and a book that reminds us just how truly, absurdly irrational we can be.
One of Sway's vignettes struck me as fascinating, though maybe misconstrued by the authors. It goes like this.
Researchers in Berlin
Here’s the catch: If the receiving partner liked the split, he or she could accept, and both walked away with their share of the $10. If the receiving partner rejected the split, however, neither partner received any money.
The game was played only once and the two strangers would remain forever strangers.
What do you think happened?
Exactly. Most times the money was split 50/50 and both sides kept $5. Moreover, if the split was unequal, the receiving party walked away from the money almost every time and both lost.
Economically, of course, this makes no sense. But the aggrieved party seemed happy to leave empty-handed if he or she felt that justice had been served.
The results were the same if $100 were split instead of $10.
“What the study demonstrates,” according to the Brafmans, “is our deep-rooted belief in fairness and the great lengths we’ll go to defend it.” The book then suggests that even the most notorious of business people—used car salesmen—have an inherent sense of fairness.
The study was reproduced at UCLA among graduate students with $160, or the equivalent of 2.3 days of labor, at stake. It turned out the same: most offers were 50/50, and those that were not were summarily rejected as unfair. UCLA grad students would rather be poor than stooges.
Eventually, researchers brought the experiment far from civilization to the Machiguengas of the Peruvian Amazon, where they again put 2.3 days of (Machiguenga) labor on the line. The result: The most common offer was 85/15, favoring the person making the deal, and the receiving partner almost always chose to accept. In interviews afterwards, the Machiguenga said that they would accept any money as a generous gift, while those splitting the money felt lucky to have been chosen (to be the spliter and not the splitee) and weren’t entirely sure why they should have to give up any at all. The tribe members who made a 50/50 offer had one thing in common—they had all spent substantial time with modern Westerners.
In the end, the authors conclude that the definition of “fair” varies, and dramatically affects us in often irrational ways.
Over the last few days I’ve been watching poor, starving Haitians fight over relief shipments of food and water. I’ve seen “fat cat Wall Street Bankers” berated in Washington
Here’s what I mean.
Let’s assume we reproduce the UCLA study, but this time we give each pair of strangers $1 billion to divvy up. And let’s say the split is 90/10, with the receiver now offered just 10%, or $100M.
I can think of very few people (ok: none) who would turn down $100M on the basis that it was “unfair.” They would gripe certainly, but I cannot imagine my most principled friend walking away from a $100M gift because he felt aggrieved that he didn’t get $500M. Which is, by the way, how—I think--the Machiguenra saw the money: they had none, and now had some, so it was the very definition of a windfall. And, who turns down a windfall?
What I’m thinking is this: As long as we can afford to feel aggrieved, we’ll do it. That means, if I’m offered $80 in an unfair exchange but can walk down the street to my ATW and withdraw $200, I’m the most aggrieved guy in the world. But if the “aggrieved amount” is a multiple of my net worth, maybe I’m feeling a heck of a lot more accommodating about being treated unfairly.
Which is another way of saying, I’m afraid, that most of us can be bought. Not on the big stuff like, say, murder or spending an eternity in Purgatory, but certainly on a little unfairness around lots of money from time to time.
Which is why, I think, we always want to be in a “walkaway” place, at least financially. If I can deal with amounts of money that are in line with my net worth, I can be much more principled than if not. And so long as I feel that I can walk away from a situation that violates my sense of fairness, I’m on safe ground.
In the Jan-Feb 2010 Harvard Business Review, Boris Groysberg and Robin Abrahams wrote about the top five reasons we tend to bungle a job change. They are: 1) we don’t do enough research, 2) we leave for money, 3) we go “from” rather than “to,” 4) we overestimate our own contributions and undervalue the strength of an organization to our success, and 5) we think short-term.
Each and every item deserves a little thought—especially #4!--but in the context of being in a “walkaway” place, I thought #3 was particularly enlightening. “Often, job seekers have become so unhappy with their present positions that they are desperate to get out,” the article says. They apply “artificial urgency to the job hunt.”
Desperate people lose, in my mind, their “walkaway place”--the position from which they can afford to let their values govern their financial decisions.
There’s that great parable in Matthew, the one where the workers are in the field working all day and some others show up to work in the last hour and everyone gets paid the same. The aggrieved workers complain that the latecomers earned as much as they did, but the Field Boss (or whatever the biblical equivalent is) asks, “Did you receive anything less than you were promised?”
Jesus doesn’t say, but I’m betting the fieldworkers who complained still accepted their pay. As will Conan O’Brien. And Wall Street will probably preserve its bonus structure. And the UCLA grad student who turned down $80 surely won’t turn down $100M.
One other sidebar: We have hatched an entire generation that will, for most of its life, do nothing but create massive amounts of intellectual property—software, services, solutions, music, literature, networks and cures. Only, this same generation has grown up in a world where stealing intellectual property on-line is standard practice—music, books, movies, software. After all, everything digital wants to be free. Oy. And if technology allows you to take it, you should. Oy again. (See Information Wants to be Free My Ass for Nicholas Carr’s stellar rebuttal.)
It will be interesting to see how our Gen Y’s version of “fair” evolves. And, as they create their own great stuff, only to have it stolen (cause it, too, wants to be free), how and when they will decide that some kind of principle of fairness and justice might be in order.
After all, what’s fair is fair. Just let me know how much it’s going to cost me first.
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