The Relative Wealth Effect In Response To Unfairness

Over the past four decades,China has experienced rapid economic growth and extensive societal changes.For instance,from 1978 to 2017,China's GDP increased more than 220 times and has become the global second largest economy after the United States.In the meanwhile,it also faces high level of wealth and income inequality.As income and wealth inequality is surprisingly high in China,it is important to investigate how relative income or wealth affects its citizens,particularly when challenged or “provoked” by unfairness.We argue that,wealth inequality yields large differences in people's perceived their relative social positions(through social comparison),and these subjective perceptions of social positions give rise to particular orientations that shape how people's decisions and judgments in social interactions.Based on this framework,recent research has examined how people differ in wealth influence their social behavior toward others(e.g.,generosity,ethical behavior),and found that the wealthy might readily develop a sense of entitlement— they feel entitled to behave in a self-serving fashion and treat others in an unfair manner.However,at present little is known about how wealth might affect people's responses to others,in particular others' unfair treatment toward themselves.This research aimed to fill this research gap by testing four questions.First,do people varying in relative wealth differ in their responses to unfair behavior? Second,if there is the relative wealth effect in response to unfainess,how can we explain this effect? Third,are there any factors moderate the role of relative wealth in response to unfairness? Forth,do people varying in relative wealth respond differently to such unfairness in the USA and China? In this thesis,we attempted to conduct three studies to answer these four questions.Study 1 included four experiments(e.g.,Experiments 1,2,3 and 4)that was used to answer the first two questions.Experiment 1 provided an initial test of whether(objective)wealthy people were more or less likely to accept an unfair offer in a one-shot ultimatum game(UG).We found that participants with higher objective family income were more likely to reject unfairness than those with lower family income.To complement the family income measure,Experiment 2 manipulated temporary perceived to have high or low income with a “lucky draw” game and found that the high-income group rejected unfair offers more frequently than the low-income group in a one-shot repeated UG.In Experiment 3,we both measured objective family income and manipulated wealth using a “lucky draw” game.Results showed that self-reported family income and wealth manipulation independently affected rejection decision in a one-shot UG,both leading to more rejections of unfairness(i.e.,the ?2/?8 offer).In Experiment 4,by including ratings of entitlement,we sought to provide more direct evidence for the mechanisms(i.e.,feelings of entitlement)that we theorize to drive the relative wealth effect in rejecting unfair offers.Moreover,we included a cost-free rejection game(CFRG;a modified ultimatum game that allows for rejection with no personal cost)to rule out an alternative explanation—the poor are in need of extra money and are less able to afford rejecting unfair offers.Different from the UG,in the CFRG,responders learned that they would receive the proposed amount of money even if they rejected the offer,whereas their partner(i.e.,the proposer)learned that both of them would receive nothing if they rejected.In addition,we also added a moderate-income group in the “lucky draw” game for comparison.This allows us to test whether the causal effect of wealth comes from being wealthy(“have-more-effect”),being poor(“have-less-effect”),or both.Results revealed that participants in the high-income group were more likely to reject unfair offers than those in the moderateand low-income groups,but the moderate-income and low-income participants did not differ in their rejections of these offers,suggesting that the causal effect of manipulated wealth on rejection of unfairness comes from being wealthy(“have-more-effect”),rather than being poor(“have-less-effect”).Also,the cost of rejection did not moderate the effect of wealth on rejection of an unfair offer.More importantly,feeling of entitlement indeed significantly mediated the effect of manipulated wealth on rejection rates.By including two experiments(e.g.,Experiments 5 and 6),Study 2 varied the source of income(i.e.,luck vs.effort)and manipulated the interaction partner's income(i.e.,high vs.low)to test whether these two factors moderate the relative wealth effect observed in Study 1.In Experiment 5,we manipulated temporary perceived wealth with a “lucky draw” game,and then informed the wealth of their interaction partner in the ultimatum game,to examine the effect of the interaction partner's wealth.This manipulation is important,because one's own and partner's income are often rapidly and accurately conveyed in social interactions.We found that when the interaction partner's wealth is known,high-income participants rejected unfair offers less often from a low-income partner,compared to a high-income partner.Experiment 6 further added an “effort-based bonus” game to manipulate source of wealth.This game involved a real effort task(i.e.,completing a questionnaire with 0 to 100 questions to get an extra bonus that assign participants to either a high-income or low-income group).Consistent with Experiment 5,we found that high-income participants were less likely to reject unfair offers from a low-income(vs.high-income)partner,and this effect was mediated by their motive to increase their partner's interest.However,we did not find any effect of the source of income in Experiment 5.Study 3 included two experiments(e.g.,Experiments 7 and 8)that mainly serves to test whether the wealthy and the poor in the United States and China differ in their responses to unfair offers.In Experiment 7,participants were randomly assigned to high-,moderate-,or low-income conditions based on whether they win a bonus in a “lucky draw” game.Participants then were randomly assigned to play an ultimatum game(UG)or a cost-free rejection game(CFRG)as the responder role,and interacted with another participant(i.e.,the unspecific proposer without information of their outcome in the “lucky draw” game)to decide how to split 10 monetary units(MU)using the strategy method.That is,they indicated whether to accept or reject nine offers(i.e.,offer-type: 1/9,2/8,3/7,4/6,5/5,6/4,7/3,8/2,and 9/1)that the proposer could divide.Results revealed that low-income participants in the USA but high-income participants were more likely to reject unfair offers that favor others.This finding supported cultural differences in the psychological effects of relative wealth in response to unfair offers.Experiment 8 attempted to replicate Experiment 6 to test wether source of income(i.e.,luck vs.effort)and manipulated the interaction partner's income(i.e.,high vs.low)moderate the relative wealth effect among American participants.We found that low-income(vs.high)Americans rejected the unfair offer more often,but only for luck-based income.Such effect was absent for effort-based income.Also,Among Americans,the mediation effect of manipulated wealth(high-income vs.low-income)on rejection decision through entitlement was significant for luck-based income,but not significant for effort-based income.However,high-income and low-income Americans' rejection decisions did not vary with their partner's income,suggesting the partner's income(i.e.,high vs.low)did not moderate the relative wealth effect among American participants.In summary,we can conclude as follows:First,people differ in perceptions of wealth showed significant differences in their responses to unfair offers.This relative wealth effect revealed that high-income participants rejected unfair offers more frequently than low-income participants.Second,feelings of entitlement accounted for this relative wealth effect: high-income participants feel more strongly entitled to fair offers,and thus reject unfair offers more often.Third,the relative wealth effect was moderated by the partner's wealth.Compared to a high-income partner,high-income participants rejected unfair offers less often from a low-income partner,and this effect was explained by their motive to increase their low-income partner's welfare.Forth,cultural differences existed in the effect of relative wealth on people's responses to unfairness.In the USA,low-income participants were more likely than high-income participants to reject disadvantageous unfair offers.Yet in China we found exactly the opposite: high-income participants were more likely to reject unfair offers than low-income participants.Fifth,the moderated mediation effect of entitlement violation on the relative wealth effect was significant.That is,when wealth was luck-based,the indirect effect of relative wealth on rejection decision through entitlement violation was significant,but not significant when wealth was effort-based.Lastly,relative to objective wealth(i.e.,family income),relative wealth was better to predict participants' decisions in response to unfair offers.