Or, how people act irrationally
There was an interesting social experiment crafted in the early 20th century, designed to show how people related to others on the subject of economic 'fairness'.
The experimentor would place two people in a room together. The rules of the experiment were these:
The two people would share $10 to be given to them. Person A would determine the split of the money, i.e. who of them would receive each percentage, determined solely by Person A.
Person B would then decide whether to accept the percentage split decided upon by Person A. If Person B did not accept, neither person would receive anything. Both parties were aware of this potential outcome.
The results of the experiment (which can be repeated today with much the same results) showed that people valued what they perceived as fairness more than financial gain. For example:
Even if Person A decided on a 90/10 split, that is to say Person A would receive $9 and Person B would receive $1, the rational economic decision for Person B would be for them to accept it, since they would receive $1 as opposed to receiving nothing by rejecting the deal. However, on the few instances where Person A did make such a lopsided proposal, Person B rejected the deal overwhelmingly.
Even more interesting, a vast percentage of people representing Person A proposed splits either 50/50 or very close to the middle split. This showed that either Person A would not take advantage of their power in choosing the split, or that Person A knew that by taking advantage of that power, Person B would punish them by rejecting the offer, presumably because Person A felt that this is what they would do if the situation were reversed.
This is a good example, I believe, of social conceptions of equality overpowering the desire of financial gain.
Note though, that when this experiment has been done in different societies around the globe, the outcomes varied widely. In various parts of the world, Person A would indeed offer a 90/10 split, and more times than not, Person B would accept the offer. These acceptance percentages went to nearly 100% when Person B was told that Person A was of a higher social class than Person B.
Food for thought.
The experimentor would place two people in a room together. The rules of the experiment were these:
The two people would share $10 to be given to them. Person A would determine the split of the money, i.e. who of them would receive each percentage, determined solely by Person A.
Person B would then decide whether to accept the percentage split decided upon by Person A. If Person B did not accept, neither person would receive anything. Both parties were aware of this potential outcome.
The results of the experiment (which can be repeated today with much the same results) showed that people valued what they perceived as fairness more than financial gain. For example:
Even if Person A decided on a 90/10 split, that is to say Person A would receive $9 and Person B would receive $1, the rational economic decision for Person B would be for them to accept it, since they would receive $1 as opposed to receiving nothing by rejecting the deal. However, on the few instances where Person A did make such a lopsided proposal, Person B rejected the deal overwhelmingly.
Even more interesting, a vast percentage of people representing Person A proposed splits either 50/50 or very close to the middle split. This showed that either Person A would not take advantage of their power in choosing the split, or that Person A knew that by taking advantage of that power, Person B would punish them by rejecting the offer, presumably because Person A felt that this is what they would do if the situation were reversed.
This is a good example, I believe, of social conceptions of equality overpowering the desire of financial gain.
Note though, that when this experiment has been done in different societies around the globe, the outcomes varied widely. In various parts of the world, Person A would indeed offer a 90/10 split, and more times than not, Person B would accept the offer. These acceptance percentages went to nearly 100% when Person B was told that Person A was of a higher social class than Person B.
Food for thought.
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