Bogliacino, F., et al. (2024).
Judgment and Decision Making, 19.
Abstract
We study why suffering a negative economic shock, i.e., a significant loss, may trigger a change in other-regarding behavior. We conjecture that people trade off concern for money with a conditional preference to follow social norms and that suffering a shock makes extrinsic motivation more salient, leading to more norm violation. This hypothesis is grounded on the premise that preferences are norm-dependent. We study this question experimentally: after administering losses on the earnings from a real-effort task, we analyze choices in prosocial and antisocial settings. To derive our predictions, we elicit social norms for each context analyzed in the experiments. We find evidence that shock increases deviations from norms.
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The research indicates another way in which moral norms shift based on context. The study investigates how experiencing significant financial losses, termed negative economic shocks (NES), influences individuals' adherence to social norms. The authors hypothesize that when individuals face NES, they become more focused on monetary concerns, leading to a higher likelihood of violating social norms. This hypothesis is grounded in the concept of norm-dependent utility, where individuals weigh the psychological costs of deviating from norms against their financial needs. The researchers conducted three experiments where participants experienced an 80% loss in earnings from a real-effort task and subsequently engaged in various tasks measuring norm compliance, including stealing, cheating, and cooperation.
The findings reveal that participants who experienced NES exhibited increased norm violations across several contexts. Specifically, there was a notable rise in stealing behaviors and a significant increase in cheating during the "die-under-the-cup" task. Additionally, the study found that retaliation behaviors decreased markedly in "joy of destruction" scenarios. Importantly, the results suggest that the effects of NES on social behavior are distinct from mere wealth effects, indicating that experiencing a shock alters individuals' motivations and decision-making processes. Overall, this research contributes valuable insights into the complex interplay between economic stressors and social behavior, highlighting how financial adversity can lead to deviations from established social norms.
