March 16, 2012

Behind the Headlines on Goldman Sachs

Are the rich really more ethically-challenged than the rest of us? They test that way, but there are other factors at work as well.

Who is more trustworthy, a rich person or a poor one? According to a new study, poor people are more likely to act ethically than the wealthy. The difference in ethical behavior may be about opportunity rather than moral fiber, however.

Researchers from UC Berkeley and the University of Toronto looked at the ethical tendencies of more than 1,000 volunteers from various socioeconomic backgrounds. The volunteers filled out surveys and also took part in seven experiments testing their willingness to act unethically. Those with an upper-class background were more likely to break the rules and the law.

Invited to take a candy or two for themselves, upper-class volunteers helped themselves to twice as much candy as the other volunteers did.

The first two experiments tested people's willingness to break the law while behind the wheel. Upper-class motorists were three times more willing to cut pedestrians off at an intersection and four times more likely to cut off other vehicles at a busy four-way intersection.

Whose road? My road.

The third experiment presented volunteers with several hypothetical cases of unethical decision-making and asked how often they had acted similarly in their lives. Once again, upper-class volunteers were the most likely to report having done so.

The fourth experiment involved assigning the volunteers a task in a laboratory where there was a jar of candy reserved for visiting children. Invited to take a candy or two for themselves, upper-class volunteers helped themselves to twice as much candy as the other volunteers did.

The fifth experiment placed the volunteers in the role of job interviewer of candidates seeking long-term employment. The volunteers were informed that this particular job would soon be eliminated and were left free to communicate this information to the applicant or not, as they saw fit. Upper-class volunteers were much less likely to inform the candidate that the job was going to be a much shorter one than anticipated.

The sixth experiment had volunteers playing a computerized dice game, with each player getting five rolls of the dice and then reporting their scores, with the player getting the highest score slated to receive a cash prize. Unbeknownst to the volunteers, the dice were rigged, limiting how high a roll was possible. Upper-class volunteers were more likely than others to report higher rolls than were actually possible — blatant cheating.

The final experiment tested attitudes about unethical behavior in the workplace — stealing cash, accepting bribes and overcharging customers. Once again, it was the upper-class volunteers who were more likely to endorse such behavior.

But this changed when participants were first primed to think about the advantages of greed and then presented with the hypothetical opportunity to act unethically. Once primed, middle and lower-class volunteers were just as likely as upper-class ones to report a willingness to engage in unethical workplace behavior if they made money from it.

Apparently, there's a little upper-class in all of us. And greed brings it out.

It's not clear from the study if being rich increases unethical behavior or if such behavior is what allows people to become rich in the first place. The researchers suggest a number of reasons why upper-class individuals are more prone to unethical behavior, citing their relative independence from others and increased privacy in their professions, and the availability of resources to deal with the costs of unethical behavior. Previous research has found that feelings of entitlement, inattention to the consequences of one's actions on others, and an increased focus on achieving goals also play a role.

An article on the study was published online by Proceedings of the National Academy of Sciences (PNAS).

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