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The abundance effect

Author: Dr Simon Moss

Overview

Some settings obviously seem impoverished. The fittings are inexpensive, and money seems limited. Other settings seem opulent. Money is obvious abundant. Interestingly, when individuals are exposed to these affluent settings, they become more inclined to behave unethically (Gino & Pierce, 2009). That is, these opulent settings tend to evoke envy, which in turn often translates into unethical acts (Gino & Pierce, 2009).

Empirical evidence

Gino and Pierce (2009) conducted a series of three studies to establish the abundance effect. In the first study, participants entered a classroom. The classroom was either teeming with cash--$7000 worth of $1 bills on a table--or relatively bereft of money. Next, participants attempted to derive as many words as possible from a series of seven letters. Finally, they were instructed to specify the number of words they uncovered.

Generally, if the classroom was teeming with money, participants were more inclined to exaggerate the number of solutions they unearthed. That is, a higher percentage of participants inflated the number of solutions. Furthermore, the magnitude of these distortions was also elevated when money was abundant (Gino & Pierce, 2009).

In the second study, participants undertook two activities. In addition to deriving words from a sequence of letters, they also completed a personality inventory, putatively for another experimenter. In one condition, only this experimenter could access bundles of money. Interestingly, even if the experimenter who administered the word task could not access the money, participants exaggerated the number of words they uncovered (Gino & Pierce, 2009).

The final study explored a series of possible mediators. First, participants specified the extent to which they felt envious--and resentment towards more affluent individuals. Second, to measure self serving biases, participants read two scenarios--about a spilt pitcher of beer and a minor car accident. They were then asked to specify the extent to which they or the other party should be blamed. Third, they completed a series of questions, intended to assess the extent to which participants were aware of their own mental states, their behavior from the perspective of someone else, and their surroundings or environment. Only envy mediated the effect of affluence on unethical behavior.

Explanations

The studies that were reported by Gino and Pierce (2009) offer some insight into the mechanisms that underpin the abundance effect. Specifically, these findings imply that abundance and affluence can evoke feelings of envy--envy towards wealthy individuals in general. Envy then motivates behaviors that redress inequities, which can translate into unethical behavior (cf., Cropanzano, Rupp, & Byrne, 2003& Smith & Walker, 2000).

Alternative explanations were proposed, but not supported. Conceivably, when individuals are exposed to affluence, they might, for some reason, focus more on their own needs, disregarding the motives and concerns of anyone else. Nevertheless, as Gino and Pierce (2009) showed, self focus did not mediate the association between affluent settings and unethical behavior. That is, whether or not the setting was teeming with money did not affect the self focus of individuals.

Furthermore, when the setting is affluent, individuals might feel their unethical behavior is less likely to harm potential victims. In these studies, for example, the experimenter might not value money as significantly. Perceptions of scarcity in the environment did not mediate the association between affluence and ethics (Gino & Pierce, 2009). Similarly, in other strands of research, studies indicate that crime is higher in poor, relative to affluent, neighborhoods (see Levitt, 1999, MacCoun, 1996).

Related findings

Similar to the abundance effect, some studies have shown that cues related to money provoke egocentric behavior. Even pictures of money, for example, promotes behavior that is intended to pursue selfish, rather than communal, goals (see Vohs, Mead, & Goode, 2006, 2008).

Money and strength

Scarcity of money does not only provoke envy but also undermines resilience (e.g., Vohs, Mead, & Goode, 2006& Zhou, Vohs, & Baumeister, 2009). To illustrate, as shown by Zhou, Vohs, and Baumeister (2009), when individuals handle money, they can withstand rejection or pain more effectively. In contrast, when they reflect upon recent expenses, they become more vulnerable to these problems.

Specifically, in one study, some participants were instructed to count 80 $100 bills. Other participants were instructed to count 80 pieces of paper. Next all of these individuals participated in a virtual game, putatively with other people. Participants who had counted the money did not feel rejected or distressed if they were occasionally excluded from this game. Participants had counted the paper, however, often felt rejected (Zhou, Vohs, & Baumeister, 2009). Similarly, if participants had counted money rather than paper, they could more readily place their hand in very hot water.

In another pair of studies, also reported by Zhou, Vohs, and Baumeister (2009), some participants enumerated their expenses over the past 30 days. Other participants, in contrast, merely enumerated the weather over this time period. If participants reflected upon their expenses, they become more sensitive to rejection or pain.

According to Zhou, Vohs, and Baumeister (2009), money instills a sense of strength or power. That is, individuals associate money with the autonomy--with control over their lives (cf., Lea & Webbey, 2006). Hence, when they feel that money is accessible, a sense of power ensues, and sensitivity to rejection, pain, or other threats diminishes.

Accordingly, if individuals feel threatened, they experience an urge to accumulate more money. As Zhou, Vohs, and Baumeister (2009) showed, after participants feel rejected, this desire to accrue money escalates. In particular, when asked to draw a coin, they sketch a large circle--which has been shown to represent a stronger desire for money (Bruner & Goodman, 1947).

Money and motivation

According to Mogilner (2010), individuals tend to associate time with personal meaning and fulfillment. When time or life seems limited, individuals seek activities that seem meaningful and enjoyable now, such as social activities. In contrast, individuals tend to associate money with utility. This emphasis on utility increases the likelihood that individuals want to detach themselves from pleasurable activities, increasing their motivation to engage in work or other burdensome tasks.

Mogilner (2010) conducted some studies that validate this perspective. In one study, participants completed a questionnaire in a cafeteria in which they needed to unscramble sets of words (see sentence unscrambling task). For some participants, some of the words alluded to time, such as "clock". For other participants, some of the words alluded to money, such as "price".

Next, the participants were permitted to engage in their own tasks. However, the experimenters surreptitiously monitored the behavior of participants. That is, whether the participants engaged in social activities, such as telephone a friend, or work activities, such as read a textbook, was assessed. If participants had been exposed to words that relate to time, instead of money, they were more inclined to engage in social activities.

In another study, participants were also exposed to words that relate to either time or money. Next, they were asked to specify the extent to which they planned to engage in four activities--working, commuting, socializing, or sex--over the next day. They also indicated the degree to which they feel these activities elicit happiness. Unsurprisingly, participants tended to assume that socializing and sex will elicit the most happiness. Nevertheless, if exposed to words that relate to money, they were not as inclined to predict they will engage in these activities.

Money and appearance

People are more willing to spend money that is worn, tattered, faded, or crumpled than money that is crisp and unspoiled (Di Muro & Noseworthy, 2012). That is, they are more inclined to feel that worn money is contaminated, perhaps by other people, and seems quite dirty or disgusting. Therefore, they like to eliminate these contaminated items.

For example, in one study, participants won $10 because of their performance on some contrived task. The $10 note was either crumpled or crisp. Next, they were granted the opportunity to gamble that $10 on another task. If they won, they would be awarded another $10 note--which was either crumpled or crisp.

Relative to the other participants, individuals who were awarded with a worn $10 bill but enticed with a crisp $10 bill were more inclined to gamble. These individuals, presumably, were more willing to lose the worn $10 bill or especially motivated to earn the crisp $10 bill.

Subsequent studies clarified the mechanisms that underpinned this effect. For example, in one study, participants were asked to indicate the feelings that either worn or crisp money evoked. Crisp money was more likely than worn money to evoke pride but less likely to evoke disgust. And these emotions mediated the association between the appearance of money and spending behavior. Likewise, in retail stores, participants were more willing to assemble the necessary coins to pay a fee rather than use a crisp rather than torn note.

Money and unethical behavior

When individuals are exposed to reminders of money, they are more likely to behave unethically. For example, in one study, conducted by Kouchaki, Smith-Crowe, Brief, and Sousa (2013), participants completed the sentence unscrambling task in which they needed to rearrange sets of five words to constructs sentences that comprise four words. For some participants, words that relate to money were embedded within these sentences. Next, participants read a set of 13 scenarios, such as one in which they are alone in the office and decide to slip a ream of paper into their bag. For each scenario, participants needed to indicate the likelihood they would engage in this act. If exposed to words that relate to money, participants were more inclined to concede they might engage in these unethical acts.

The second study showed that reminders of money increase the salience of business. Specifically, after exposed to words or pictures that relate to money, participants were more likely to recognize business words from word fragments& they noticed that MAR --- could represent "market" and TRA-- could represent "trade", for example. Further studies showed that reminders of money increase the likelihood of cheating and similar unethical behaviors. These relationships persisted after controlling feelings of self-sufficiency or power.

Specifically, these studies showed that reminders of money prime a business frame. When people adopt a business frame, they objectify people and weigh the costs and benefits rationally, sometimes dismissing emotions and feelings. Because of this disregard of emotions and feelings, their decisions are sometimes unethical.

Money and attitudes towards inequality

Exposure to money also increases the likelihood that people endorse the existing hierarchies in society rather than seek equality. To illustrate, in one study, conducted by Caruso, Vohs, Baxter, and Waytz (2013), American participants read a series of instructions. On the background was either a clear or blurry image of $100 bills. Next, they completed a measure of system justification, in which they were asked to indicate the extent to which American institutions are fair. If exposed to a clear image of the $100 bill, participants were more likely to assume the existing institutions are fair.

Subsequent studies extended these findings. In these studies, other procedures were used to manipulate exposure to money, such as the sentence unscrambling task, in which participants were incidentally exposed to words that are related or unrelated to money. Exposure to money increased the likelihood that participants believed the world is fair and just, felt that some groups are inherently superior to other groups, called social dominance orientation, and maintained that unmitigated free markets are appropriate--even in instances in which these free markets do not yet prevail.

Presumably, people tend to associate money with business transactions, coinciding with the assumption that free markets are fair and that people should strive to be self-sufficient. These mindsets may diminish awareness of injustices and thus reduce concern towards people who are socially disadvantaged. Indeed, in an additional pilot study, Caruso, Vohs, Baxter, and Waytz (2013) showed that money increases the perceived value of power and inhibits the perceived value of universalism--the assumption that people should strive to protect the welfare of other individuals.

Practical implications

Managers often strive to curb unscrupulous behavior in the workplace, such as unethical billing or theft. To achieve this goal, they should ensure the fittings or furnishings of their organization are not too opulent. Managers should not wear or use expensive products. Such conspicuous affluence merely provokes unethical behavior.

References

Baumeister, R. F., & Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a fundamental human motivation. Psychological Bulletin, 117, 497-529.

Bruner, J. S., & Goodman, C. C. (1947). Value and need as organizing factors in perception. Journal of Abnormal and Social Psychology, 42, 33-44.

Caruso, E. M., Vohs, K. D., Baxter, B., & Waytz, A. (2013). Mere exposure to money increases endorsement of free-market systems and social inequality. Journal of Experimental Psychology: General, 142, 301-306. doi: 0.1037/a0029288

Cropanzano, R., Rupp, D. E., & Byrne, Z. S. (2003). The relationship of emotional exhaustion to work attitudes, job performance, and organizational citizenship behaviors. Journal of Applied Psychology, 88, 160-169. .

Di Muro, F., & Noseworthy, T. J. (2012). Money isn't everything, but it helps if it doesn't look used: How the physical appearance of money influences spending. Journal of Consumer Research, 1330-1342. doi:10.1086/668406

Gino, F., & Pierce, L. (2009). The abundance effect: Unethical behavior in the presence of wealth. Organizational Behavior and Human Decision Processes, 109, 142-155.

Kouchaki, M., Smith-Crowe, K., Brief, A. P., & Sousa, C. (2013). Seeing green: Mere exposure to money triggers a business decision frame and unethical outcomes. Organizational Behavior and Human Decision Processes, 121, 53-61. doi:10.1016/j.obhdp.2012.12.002

Lea, S. E. G., & Webley, P. (2006). Money as tool, money as drug: The biological psychology of a strong incentive. Behavioral and Brain Sciences, 29, 161-209.

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MacDonald, G., & Leary, M. R. (2005). Why does social exclusion hurt? The relationship between social and physical pain. Psychological Bulletin, 131, 202-223.

Mogilner, C. (2010). The pursuit of happiness: Time, money, and social connection. Psychological Science, 21, 1348-1354.

Smith, P. C., & Walker, J. W. (2000). Layoff policies as a competitive edge. Competitiveness Review, 10, 132-145.

Vohs, K. D., Baumeister, R. F., & Loewenstein, G. (2007). Do emotions help or hurt decision making? A hedgefoxian perspective. New York: Russell Sage Foundation Press.

Vohs, K. D., Mead, N. L., & Goode, M. R. (2006). The psychological consequences of money. Science, 314, 1154-1156.

Vohs, K. D., Mead, N. L., & Goode, M. R. (2008). Merely activating the concept of money changes personal and interpersonal behavior. Current Directions in Psychological Science, 17, 208-212.

Zhou, X., Vohs, K. D., & Baumeister, R. F. (2009). The symbolic power of money: Reminders of money alter social distress and physical pain. Psychological Science, 20, 700-706.



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Last Update: 6/29/2016