Does thinking about money encourage unethical behaviour?

Here we explain money's effect on greed, lying and happiness. The science may surprise you.

Seeing financial cues – even merely thinking about money – encourages unethical behaviour, according to Harvard researchers.

Exposure to money-related words and images, the study suggests, leads people to frame situations as ‘business transactions’. The consequence is more cheating, lying, and acting selfishly without regard to others.

The researchers primed participants with money cues by getting them to make sentences out of word clusters that had a financial focus (e.g. ‘She spends money liberally’). The control group received neutral words, and participants were then asked to choose between various ethical and unethical behaviours.

One finding was that people exposed to money-related words were twice as likely to lie as the control group – whether or not there was a direct financial reward. Another finding was that participants were more likely to cheat and make unethical decisions to earn higher payouts.

Previous psychological research has also shown that having an economics education promotes greed, and that business students had a more positive attitude towards greedy behavior.

Part of the study, known as the Dictator Game, goes like this: One participant, the ‘dictator’, gets to decide how to split a cash prize between him or herself and a second player. The second player gets whatever is leftover (a variant of the game gives the second player the option to reject the offer, causing both parties to go home empty-handed). The study found that economics majors were more likely to keep extra money for themselves when asked to split the prize.

‘Other work finds that after exposure to money, people are less likely to help others, less likely to ask for help, and more likely to work alone. Other researchers have demonstrated that priming people to think about business elicits competitive and self-interested behavior’, said Dr Maryam Kouchaki, one of the researchers.

Money buys happiness

Our relationship with money is complex, but there are also some endearing studies that show our better side.

In 2013, researchers at Harvard University approached people on campus and gave them either $5 or $20 and said they need to spend it by the end of the day. Half the participants were asked to spend it on themselves; the other half were told to spend it on someone else.

When asked what would make them happiest, most participants predicted that spending more money ($20 vs $5) and spending it on themselves would do more for their mood than giving it away.

However, when the researchers checked on their subjects that evening, those who had spent the money on someone else or donated it to the homeless reported feeling more positively. 

There’s a final twist: there was no difference in happiness between those who spent $5 or $20 – suggesting it isn’t how much you have to spend, but how you spend it, that makes the difference. Thinking about money may make us greedy – but spending it on others makes us happy. 

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