Everyone has a price, but there’s a limit? What will people (not) do for money?
“Questions: Would most people you know kill their favorite pet for $1 million? What about you?
Answers: Most people: Yes (23%) No (72%);
Yourself: Yes (11%) No (83%).”
A recent Vanity Fair poll, via Robin Hanson (whom I no longer read on a regular basis, but still visit once in a while). Hanson claims that you’d take the million. The survey and the responses made me start thinking about what people will actually do for money, what they won’t and which variables impact that decision process. Some general remarks:
i. Financial vulnerability/poverty lowers ‘your price’ and increases the choice set of stuff you’d do to get money.
ii. ‘Status effects’ matter – Hanson of course covers this. A few remarks: People usually know what ‘the right answer’ to these types of questions is supposed to be, and the more costly it seems to ‘do the right thing’, the higher the status value of professing that specific belief. It’s a bit like when dealing with religious tribes; the more crazy the idea is, the more credible the signal. This observation also in my mind leads to a related hypothesis: To make it more costly (in terms of time, effort, money) to ‘do the right thing’ in the hypothetical does not necessarily make it any less likely that people will ‘take the money’ – actually it can have the opposite effect, because the value of the signal goes up as well; perhaps the value of the signal increases even faster than the hypothetical costs, especially above a certain threshold where people decide that their choices will have no real-world consequenses. Paradoxically, by making one of the options so attractive as to be borderline absurd you can end up making sure that a lot of people will give you the opposite answer – i.e. ‘the perceived right answer’.
iii. Framing effects matter. Framing effects persist when people deal with real money in real-world settings, rather than hypothetical questions with no real-world consequences, but people usually act more rationally when they have more ‘skin in the game’. This, I think, lends support to the hypotheses that people will both a) treat the two scenarios – i. the hypothetical case, ii. the actual situation – as completely different in their minds given aforementioned threshold effects, and b) be more subject to framing effects (i.e. be less ‘rational’) in the hypothetical case. Unless you show up with a million dollars and an axe to kill the dog, the people you ask will only ever deal with the first scenario and those answers will not give much insight into what people would actually do if you came around with a check and an axe.
iv. Related to i., but still worth mentioning: There are likely threshold effects at work when dealing with choice set limitation. Poor people will be more likely to do some act X for a given amount of money Y than rich people will – but maybe it’s also the case that given some income level Z, some options simply go off the table altogether, given any price. Would a parent of three kill all their children for X dollars? This is probably where stuff like Maslow’s hierachy of needs and similar stuff from psychology come into play. Money is a claim on ressources. Still, people probably underestimate how important such claims on ressources can become.
v. Related to the last part of iv. above, correspondence bias probably play a role here when it comes to how people answer and how the hypothetical choice set limitation looks like. If correspondence bias is important, it’s probably safe to say that people who’ve answered the question as if they considered it (subconsciously, perhaps) a test of their support of the tribe/allegiance/trust will be unlikely to accept the idea that they’d act perhaps even radically differently in the real-world-scenario.
vi. “The report titled “The Big Payoff: Educational Attainment and Synthetic Estimates of Work-Life Earnings” […] reveals that over an adult’s working life, high school graduates can expect, on average, to earn $1.2 million; those with a bachelor’s degree, $2.1 million; and people with a master’s degree, $2.5 million.
Persons with doctoral degrees earn an average of $3.4 million during their working life, while those with professional degrees do best at $4.4 million.” (link)
A third way to frame the question: You’re an average Joe with a master’s degree. You’re 25 and currently expect to work another 40 years on the labour market before you retire. If you choose to kill your dog today, you get 16 years of income tomorrow. You’d be able to retire at the age of 49, instead of at the age of 65 (this is disregarding discounting, compounded interest ect.; so the ‘subjective true value’ of that money will likely be even higher than that). Next, repeat the question using the high school grad numbers. A million dollars is a lot of money and it can buy you a lot of stuff.
I assume most readers of this blog would assume that they’d take the money in a real-world setting (though it’s impossible to be sure ‘unless [someone] show[s] up with a million dollars and an axe to kill the dog…’). If you think you wouldn’t take the money in the real-world scenario, please comment below!
Appendix (added after swissecon’s comment):
A factor I didn’t include above is the ‘love of the pet’ variable. This one is a double-edged sword as well because there are relevant tradeoffs here too: The longer you’ve had the pet, the greater attachment you’ll feel towards it (ceteris paribus), but also the less time the pet has left of its life. All pets die, and if you’ve had your dog for a decade even though you love it very much you’ll know that it probably doesn’t have a lot of years left. The pet’s life has to end in a few years anyway. Lots of people who have pets that they love end the life of the pet before nature would by paying a vet to kill the pet, to ease the suffering of the pet. I’m not saying it’s an easy decision to make, I know it’s not, but lots of people do it all the time. How hard would it be to push that decision, say, 2 years ahead and get paid a million dollars to do it? 3 years? These aren’t questions I just bring up to make people uncomfortable – the point is that questions like these will be perfectly natural to ask yourself if the guy was actually standing in your yard with that 1 million dollar check and an axe. And it’s because of questions like those that I think people are lying to themselves if they claim that they’re relatively certain they would never kill the pet.
There are cases where the love will be very strong, like an 80-year-old with a 13 year old cat. But the combination of advanced age of both the pet and the pet-owner is not exactly the default situation when dealing with pets and pet-owners. Another important factor at play in that situation is also that an 80-year-old will have a lot less use of the money, because a lot of spending options available to young people are no longer available to her or him.