Why would anyone pass up free money?
Everyone loves free money, don’t they? It turns out we are far more stimulated by the idea of equity than by free money. Equity can create a strong emotional reaction; either a threat or reward reaction. This sense of fair play stimulates the reward centre in the brain that relates to pain and pleasure.
Emotions based on fairness can run high in day-to-day situations. Imagine being “taken” by a taxi driver, where they take you on a longer route, charging you a few bucks more. The few extra bucks and the feeling of being cheated can ruin an otherwise great day. The legal system is based on the principle of fairness. Many people are prepared to spend lots of money to “right a wrong” in court, with no real economic win other than justice. Justice can be expensive.
Lieberman and Tabibnia, of Carnegie Mellon University, used The Ultimatum Game to measure this concept of fairness. In the game two people receive an amount of money to split between them. Person A makes a proposal to person B, who has to decide whether to accept it or not. If person B doesn’t accept the proposal, both receive nothing. In the West, a 50-50 split it is accepted most of the time. When the offer is 80-20 (in favour of the person making the offer) it is rejected most of the time. This means person B is more likely to pass up free money if they believe person A is being unfair. In fact when participants receive $5 out of $10, the reward centre in their brain lights up more than when they receive $5 out of $20. Our pleasure/reward circuitry is activated more when the offer is perceived as fair. An unfair offer produces resentment,and may lead to the desire to punish.
Neuroscientist Stephen Pinker, in his book How the Mind Works, suggests that the fairness response emerged out of our culture of fair trade. In our evolutionary past, we survived by doing favours for each other. These Favours were stored in our brains, as a potential reciprocal favours down the road. These exchange were important in the days without supermarkets. To survive we developed the ability to spot those who were not fair.
Equity can have a greater impact on your business than money. So be aware of how fair your interactions come across.
If you want to learn how to create One Clear Message when communicating and how fairness impacts communication then contact us today!
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