Youre a loser. Do our beliefs about justice, skill, and trust change depending on whether we feel like a winner or a loser? Yes, according to new research from Jazmin L. Brown-Iannuzzi, Kristjen B. Lundberg, and B. Keith Payne of UNC Chapel Hill and Aaron C. Kay of Duke University. To explore these issues, the researchers used an online game to ask about a particularly hot-button issue: wealth redistribution. The researchers conducted a series of experiments for their new paper, one of which is particularly interesting. They created an online game based on the stock market and gave participants 40 cents to invest in as many as six different “companies,” supposedly based on real firms. To make the game seem realistic, the researchers gave the participants descriptions of each business, past stock performance, price-to-earnings ratios, and guides to help them interpret all the information. The researchers told the participants that, after they made their investment selections, the computer would run through six months of actual stock market activity. What really happened is that gains and losses were randomly assigned. (And yes, this kind of makes me feel kind of bad for the “investors,” especially if any of them carefully pored over the price-to-earnings ratios.) Researchers nevertheless told a third of the participants that they’d performed “better than 89% of all players to date” while another third was told they’d performed “worse than 89% of all players to date.” The final third, a control group, wasn’t told anything about how their performance stacked up. Finally, the top earners had their winnings docked by 20% to offset the losses of the lower performers, while the lower performers received a bonus equal to 25% of their assets. After all of this wheeling and dealing, participants in the game were asked to recommend changes to how the earnings were redistributed. Would they recommend winners keep more of their winnings, or give more of it away? How big a bonus should the losers receive? As you might expect, the winners were more likely to oppose redistribution. The losers, though, hardly became socialists; most of them seemed cool with keeping the status quo. As for the control group, they were somewhere in between, but closer to the winners. The researchers also asked the “investors” to rate the fairness of both the game and America’s economic system. The winners were significantly more likely than the losers to think both the totally fake game and the very-real American economic system were just. Again, the control group tended to be closer to the high-status group. Clearly, our beliefs change depending on whether we’ve won or lost (and whether we know the score at all). But does winning or losing change how we interpret other people’s beliefs? To find out, the researchers ran the experiment again, this time dispensing with the control group (since they acted so much like winners) and asking participants, this time, to rate the previous group’s tax recommendations and assess them for bias. What they found – after rather a lot of math – was that players who recommended redistributing more wealth were seen as more biased by self-interest, but only by the winners. Players who wanted to cut redistribution were seen as relatively less biased, and, interestingly, perceived the same by both winners and losers. And importantly, the researchers document – through two other studies – that it’s not objectively being a winner or a loser that changes our views and makes us suspect others are biased. It’s just subjectively feeling that way. As the authors put it, “subjective status motivates shifts in support for redistributive policies along with the ideological principles that justify them.” Perhaps this study can help explain why, despite America’s stark income inequality, voters remain largely opposed to greater wealth redistribution. If being at the top makes you averse to sharing and more likely to see those who disagree with you as biased, while the people at the bottom are largely OK with the status quo, if the people who don’t know where they rank in the pecking order act pretty much like the people at the top, and if everyone is less suspicious of people who want to reduce wealth redistribution than they are of those who want to increase it – then 60 years of falling tax rates suddenly don’t seem so strange. A critic might point out that the study only measured participants’ opinions in a highly artificial setting. Maybe it doesn’t really imply much for the real world. But here’s another way to think about it: if your opinion changes after participating in an online game in which you’ve wagered less than 50 cents, imagine how much it might shift after a career that spans 50 years. And in fact, we do have some real-world data to explore how our income changes our belief systems. Numerous studies have found that Americans don’t really have a good handle on where they stand in the economic pecking order. A plurality of Americans still describe themselves as middle class, and the wealthy tend to think they’re poorer than they are. A 2012 survey found that even most people making over $250,000 a year estimate they’re only in the top 20% when fact, they’re at least in the top 3%. Other research shows that if you ask most people what it would take for them to “feel wealthy,” they give you a figure double their current income, regardless of what that income is. And Suzanne Mettler of Cornell has found that about half of the people who have benefited from federal wealth redistribution programs believe they’ve never benefited from such a program. It’s like the opposite of the Lake Woebegon effect: instead of all the children being above average, we all think we’re average regardless of the truth. This confusion over where we all stand can lead to some hilarious datapoints, like the 2011 Gallup poll that found that while only 6% of people earning $250,000 a year think their own taxes are “too low,” a full 30% of that income quintile think “the wealthy” aren’t paying enough. (Attn: you are the wealthy.) The same Gallup study found that the higher your income quintile, the more likely you are to feel that your taxes are too high. The poorer you were, the more likely you were to say that the status quo was “about right.” This gibes directly with the findings of the laboratory findings above, and suggests that even though Americans may hesitate to apply the word “wealthy” to ourselves, we’re not as agnostic about our socioeconomic status as we like to pretend to pollsters. Amid all of this confusion, it may help to clarify where you stand. The Pew Research Center defines middle class as an annual income anywhere between $39,418 and $118,255 (in 2011 dollars). Now tell me: do you feel like a winner? And do you think this game is fair?
Posted on: Sun, 28 Dec 2014 23:00:01 +0000
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