Are People Inequality Averse?

People are averse to a great many things: most of us are averse to the smell of feces or the taste of rotting food; a few people are averse to idea of intercourse with opposite sex individuals, while many people are averse to same-sex intercourse. As I have been learning lately, there are also many people who happen to be in charge of managing academic journals that are averse to the idea of publishing research papers with only a single experiment in them. Related to that last point, there have been claims made that people are averse to inequality per se. I happen to have a new (ish; it’s been written up for over a year) experiment which I feel speaks to the matter that I can hopefully find a home for soon. In the meantime, since I will be talking about this paper at an upcoming conference (NEEPS), I have decided to share some of the results with all of you pre-publication. Anyone interested in reading the paper proper can feel free to contact me for a copy.

   And anyone out there with an interest in publishing it…

To start off, consider the research that my experiment was based on which purports to demonstrate that human punishment is driven by inequality, rather than losses; a rather shocking claim. Rahani & McAuliffe (2012) note that many experiments examining human punishment possess an interesting confound: they tend to generate both losses and inequality for participants. Here’s an example to make that more concrete: in what’s known as a public goods game, a group of four individuals are each given a sum of money. Each individual can decide how much of their money to contribute to a public pot. Every dollar put into the public pot gets multiplied by three and then the pot is equally distributed among all players. From the perspective of getting the maximum overall payment for the group, each member should contribute all their money, meaning everyone makes three times the amount they started out with. However, for any individual player to maximize their own payment, the best course of action is to contribute nothing, as every dollar contributed only returns 75 cents to their own payment. The best payoff for you, then, would be if everyone else contributed all of their money (giving you $0.75 for every dollar they have), and for you to keep all your money. The public and private goods are at odds.

A large body of literature finds that those who contribute to the public good are more likely to desire that costs be inflicted on those who do not contribute as much. In fact, if they’re given the option, contributors will often pay some of their remaining money to inflict costs on those who did not contribute. The question of interest here is what precisely is being punished? On the one hand, those who contributed are, in some sense, having a cost inflicted on them by less cooperative individuals; on the other, they also find themselves at a payoff disadvantage, relative to those who did not contribute. So are these punitive sentiments being driven by losses, inequality, or both?

To help answer that question, Rahani & McAuliffe (2012) put together a taking game. Two players – X and Y – started the game with a sum of money. Player X could take some amount of money from Y and add it to his own payment; player Y could, in turn, pay some of their money to reduce player X’s payment following the decision to take or not. The twist on this experiment is that each player started out with a different amount of money. In cents, the starting payments were: 10/70, 30/70, and 70/70, respectively. As player X could take 20 cents from Y, the resulting payments (if X opted to take the money) would be 30/50, 50/50, or 90/50. So, in all cases, X could take the same amount of money from Y; however, in only one case would this taking generate inequality favoring X. The question, then, is how Y would punish X for their behavior.

The experiment found that when X did not take any money from Y, Y did not spend much to punish (about 11% of subjects paid to punish the non-taker). As there’s no inequality favoring X and no losses incurred by Y, this lack of punishment isn’t terribly shocking. However, when X did take money from Y, Y did spend quite a bit on punishment, but only when the taking generated inequality favoring X. In the event that X ended up still worse off, or as well off, as Y after the taking, Y did not punish significantly more than if X took nothing in the first place (about 15% in the first two conditions and 42% in the third). This would seem to demonstrate that inequality – not losses – is what is being punished.

 ”Just let him take it; he’s probably worse off than you”

Unfortunately for this conclusion, the experiment by Raihani & McAuliffe (2012) contains a series of confounds as well. The most relevant of these is that there was no way for X to generate inequality that favored them without taking from Y. This means that, despite the contention of the authors, its still impossible to tell whether the taking or the inequality is being punished. To get around this issue, I replicated their initial study (with a few changes to the details, keeping the method largely the same), but made two additions: the introduction of two new conditions. In the first of these conditions, player X could only add to their own payment, leaving Y’s payment unmolested; in the second, player X could only deduct from player Y’s payment, leaving their own payment the same. What this means is that now inequality could be generated via three different methods: someone taking from the participant, someone adding to their own payment, and someone destroying some of the other participant’s payment.

If people are punishing inequality per se and not losses, the means by which the inequality gets generated should not matter: taking should be just as deserving of punishment as destruction or augmentation. However, this was not the pattern of results I observed. I did replicate the original results of Raihani & McAuliffe (2012) – where taking resulted in more punishment when the taker ended up with more than their victim (75% of players punished), while the other two conditions did not show this pattern (punishment rates of 40% and 47%). When participants had their payment deducted by the other player without that other player benefiting, punishment was universally high and inequality played no significant role in determining punishment (63%, 53%, and 51%, respectively). Similarly, when the other player just benefited himself without affecting the participant’s payment participants were rather uninterested in punishment, regardless of whether that person ended up better off than them (18%, 19%, and 14%).

In summary, my results show that punishment tended to be driven primarily by losses. This makes a good deal of theoretical sense when considered from an evolutionary perspective: making a few reasonable assumptions, we can say any adaptation that led its bearer to tolerate costs inflicted by others in order to allow those others to be better off would not have a bright reproductive future. By contrast, punishing individuals who inflict costs on you can readily be selected for to the extent that it stops them from doing so again in the future. The role of inequality only seemed to exist in the context of the taking. Why might that be the case? While it’s only speculation on my part, I feel the answer to that question has quite a bit to how other, uninvolved parties might react to such punishment. If needier individuals make better social investments – all else being equal – other third parties might be less willing to subsidize the costs of punishing them, deterring the actual person who was taken from from punishing the taker in turn. The logic is a bit more involved than that, but the answer to the question seems to involve wanted to provide benefits towards those who would appreciate them most for the best return on it.

“Won’t someone think about the feelings of the rich? Probably not”

The hypothesis that people are averse to inequality itself seems to rest on rather shaky theoretical foundations as well. An adaptation that exists to achieve equality with others sounds like a rather strange kind of mechanism. In no small part, it’s weird because equality is a constraint on behavior, and constraining behavior does not allow certain, more-useful outcomes to be reached. As an example, if I have a choice between $5 for both of us or $7 for you and $10 for me, the latter option is clearly better for both of us, but the constraint of equality would prevent me from taking it. Further, if you’re inflicting costs on me, it seems I would be better off if I could prevent you from inflicting them. A poorer person mugging me doesn’t suddenly mean that being mugged would not be something I want to avoid. Perhaps there are good, adaptive reasons that equality-seeking mechanisms could exist despite the costs they seem liable to reliably inflict on their bearers. Perhaps there are also good reasons for many journals only accepting papers with multiple experiments in them. I’m open to hearing arguments for both.

References: Marczyk, J. (Written over a year ago). Human punishment is not primarily motivated by inequality aversion. Journal of Orphan Papers Seeking a Home. 

Raihani, N. & McAuliffe, K. (2012). Human punishment is motivated by inequality aversion, not a desire for reciprocity. Biology Letters, 8, 802-804.

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