Here’s your choice: You and a stranger each receive $8; or you get $10, and the stranger gets $12.
Economists assume you’d go for the $10 because you’d get more money. But new research shows that people who are feeling threatened or worried about their social status will choose the option that gives them less — but the same amount as the stranger.
That choice satisfies an important psychological need, according to Geoffrey Leonardelli, Ph.D., a professor at the University of Toronto’s Rotman School of Management, who co-wrote the paper with Vanessa Bohns, Ph.D., from the University of Waterloo and Jun Gu, Ph.D., from Australia’s Monash University.
People who choose the lower monetary reward “have a reason for their behavior, and that reason is to protect themselves from low status,” Leonardelli said. He described low status “as a low position or rank in relation to others.”
Through a series of experiments, the researchers found that people who showed a preference for “relative outcomes” — economic payoffs that gave them the same amount or more than others — had a focus on security and sought to protect themselves from being assigned to a lower position or rank.
People who looked for “absolute” outcomes — the overall economic payoff — had a “growth” focus, one that goes after maximum positive results.
“People with a security focus also tend to walk away from economic deals that suggest they have low status, even if walking away means earning less money than they could have,” said Gu, the lead author on the research.
In one experiment, researchers offered participants $1, telling them that the stranger would get $9. Even though they would have pocketed an additional $1, about 48 percent of those with a security focus rejected the offer. Only 17 percent of those with a growth focus turned the offer down, the researchers report.
Previous studies by the researchers showed that, in negotiations, those with a growth focus tend to set higher goals, are more aggressive in their negotiating, and ultimately attain better gains for all those involved.
“People with a growth focus appear to more easily move back and forth between cooperation and competition,” said Leonardelli. That’s because they have no “no special fears or concerns about their own security.”