Screw your neighbor

More from The Meetings.

Karla Hoff is a World Bank economist who has unexpectedly become interested in spite.

In her case, spite (simply put) is the idea that we would want to reduce the good luck of someone else, even if it did not affect our own personal welfare, and even if it cost us something ourselves. She finds spiteful actions to be surprisingly widespread in several experiments in India.

In her instance, she observes Indian participants playing an experimental game. I won’t go into the gory details, but suffice to say, if the players cooperate, they both walk away with money in their pockets. If one of the players chooses to take advantage of the other, he walks away with the whole pot.

The trick in this case is that there is also a third party who decides after the fact whether to punish one of the players by fining him a significant amount. The third party enforcer doesn’t get to keep the fine. In fact, he actually has to spend a tiny amount of his own funds to punish anyone at all.

Not so surprising: some enforcers chose to punish defectors. Sure it’s costly, but we’ve observed in the past that people are willing to take some effort to right a social wrong.

Big surprise: some enforcers chose to punish the cooperators! While fewer in number than those who punish the defectors, a significant proportion spend money to punish people who “do the right thing”.

Why? From one enforcer: “I’m jealous of him. I want to bring him down”.

That’s right. People spend their own money to punish random strangers for their good fortune.

Depressed yet? Just wait.

In a second experiment, players could again cooperate with one another or not (there is no enforcer in this case). Players are also told about the caste (social standing) of those that they are playing with.

Not so surprising: low castes cooperate the most with one another, and even with the high castes (but less so).

Surprising: the high castes screw one another, big time. Left, right and center.

Is this finally evidence that the rich and privileged are jerks? Maybe, maybe not.

When the two games are combined, it turns out that a slim majority of high caste players will actually spend their own money to reduce the benefits received by the second player. The low caste players do the same, but at less than half the rate.

So far, the rich jerk hypothesis is looking pretty good.

But when Player 1 is given the opportunity to be nice—to raise the income of Player 2 at a small cost, a large proportion of Player 1’s choose to do. However, 1’s are much less likely to undertake such altruistic acts if Player 2’s gain is going to make him better off than 1.

So the privileged can be naughty or nice, but generally they prefer a little inequality between themselves and their fellow villagers.

The conclusion: at least in this one little corner of the world, spite seems to be an obstacle to economic cooperation and coordination.

What would be interesting is, if you could run several variations of this experiment, you could actually calculate the price of spite—what people would be willing to pay to harm others, and under what circumstances.

The strange and sad thing is, even if you get ahead of your neighbor, there are still 6 billion minus one people ahead of you. You’re not really ahead in any real sense. Yet you still trip your neighbor.

The main conclusion I take away from this experiment: Humanity is doomed. DOOMED!