Wealthier people more likely to lie or cheat: Study

Wealthier people more likely to lie or cheat: Study
Some wealthier people “perceive greed as positive and beneficial,” experiments suggest
MAR 23, 2012
Maybe, as the novelist F. Scott Fitzgerald suggested, the rich really are different. They're more likely to behave badly, according to seven experiments that weighed the ethics of hundreds of people. The “upper class,” as defined by the study, were more likely to break the law while driving, take candy from children, lie in negotiation, cheat to increase their odds of winning a prize and endorse unethical behavior at work, researchers reported today in the Proceedings of the National Academy of Sciences. Taken together, the experiments suggest at least some wealthier people “perceive greed as positive and beneficial,” probably as a result of education, personal independence and the resources they have to deal with potentially negative consequences, the authors wrote. While the tests measured only “minor infractions,” that factor made the results, “even more surprising,” said Paul Piff, a Ph.D. candidate in psychology at the University of California, Berkeley, and a study author. One experiment invited 195 adults recruited using Craigslist to play a game in which a computer “rolled dice” for a chance to win a $50 gift certificate. The numbers each participant rolled were the same; anyone self reporting a total higher than 12 was lying about their score. Those in wealthier classes were found to be more likely to fib, Piff said. “A $50 prize is a measly sum to people who make $250,000 a year,” he said. “So why are they more inclined to cheat? For a person with lower socioeconomic status, that $50 would get you more, and the risks are small.” Community Standards Poorer participants may be less likely to cheat because they must rely more on their community to get by, and thus are more likely adhere to community standards, Piff suggested. By comparison, “upper-class individuals are more self-focused, they privilege themselves over others, and they engage in self- interested patterns of behavior,” he said in a telephone interview. To be sure, Piff and his colleagues also said the associations they found were likely to have exceptions, pointing to Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., who has pledged the majority of his holdings to the Bill & Melinda Gates Foundation and other charities, and the whistle-blowing of Cynthia Cooper and Sherron Watkins, former officials of Worldcom Inc. and Enron Corp., respectively. Less wealthy individuals also can behave badly, they wrote, noting the relationship between poverty and violent crime in previous research. They urged further study to determine the “boundaries” of bad behavior spurred by greed. Visual Evidence The studies Piff and his colleagues completed weren't meant to measure the ties between socioeconomic status and violent crime, but rather simple bad behavior, he said. Some of the experiments offered visual evidence, for instance determining whether people with more expensive cars observed traffic laws in the San Francisco Bay Area, yielding to cars and pedestrians at an intersection, or whether individuals took candy identified as being set aside for kids. Others polled people on what decision they might make in a given situation. In the traffic tests, about one-third of drivers in higher- status cars cut off other drivers at an intersection watched by the researchers, about double those in less costly cars. Additionally, almost half of the more expensive cars didn't yield when a pedestrian entered the crosswalk while all of the lowest-status cars let the pedestrian cross. These experiments involved 426 vehicles. Salary Negotiation Another test asked 108 adults found through Amazon Inc.'s work-recruiting website Mechanical Turk to assume the role of an employer negotiating a salary with someone seeking long-term employment. They were told several things about the job, including that it would shortly be eliminated. Upper-class individuals were more likely not to mention to the job-seeker the impermanence of the position, the research found. Meredith McGinley, an assistant professor at Chatham University in Pittsburgh who wasn't involved in the study, was critical of how some of the experiments were designed. The design of the car experiments complicates the picture because having a flashy car doesn't necessarily mean the driver is wealthy, said McGinley, who studies positive social behavior. In the experiment involving candy, the participants were told they could have it even though the children were waiting for it. They may have felt they were doing nothing wrong, she said. The research indicates that valuing greed leads to unethical behavior, not necessarily that social class causes bad behavior, McGinley said, adding, “greediness seems like a much more substantial predictor than income.” Previous Research The study builds on previous research that has shown wealthy people are worse at recognizing how others feel and are more likely to be disengaged during social interactions than others, the authors wrote in the paper. That seems to be the case even in primates, said Piff, who describes his status growing up as being “relatively comfortable, middle-class.” Because of his education, he's now “probably upper-middle class,” he said. “It's not that the rich are innately bad, but as you rise in the ranks -- whether as a person or a nonhuman primate -- you become more self-focused,” Piff said. “You can change that by reminding upper-class people of the needs of others. That may not be their default, but have them do it is sufficient to increase their patterns of altruistic behavior.” --Bloomberg News--

Latest News

Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale
Stratos Wealth Holdings closes 11 acquisitions in push for advisory scale

RIA aggregator adds $4.8 billion in client assets across seven states as demand grows for alternatives to traditional succession models.

Beyond wealth management: Why the future of advice is becoming more human
Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up
Shareholder sues FS KKR Capital board, alleges NAV and dividend cover-up

Shareholder targets FS KKR Capital's directors over alleged portfolio valuation and dividend missteps.

UBS loses $1.2 million arbitration claim linked to variable annuities and margin
UBS loses $1.2 million arbitration claim linked to variable annuities and margin

UBS has a history of costly litigation stemming from the sale of volatile investment products.

'We are monitoring the situation,' SEC says of private funds
'We are monitoring the situation,' SEC says of private funds

New director David Woodcock puts firms on notice over fees, conflicts, and liquidity risk as private credit shows signs of stress.

SPONSORED Beyond wealth management: Why the future of advice is becoming more human

As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management

SPONSORED Durability over scale: What actually defines a great advisory firm

Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline