How Social Ranking Affects Choice Behaviour

How Social Ranking Affects Choice Behaviour

Article Date: 21 Oct 2008 – 4:00 PDT

In the famous Dutch Post Code Lottery, the winning ticket is drawn on
the basis of the post code. When the post code of somebody who didn’t
buy the ticket is drawn, this person is surrounded by winning
neighbours who are suddenly very rich. As well as the regret for not
buying the ticket, this unlucky person feels a strong sense of envy.
The case of a Dutch women who, in anger and frustration, actually sued
the lottery for the reimbursement of moral damages was reported in the
press.

The way we
evaluate the outcome of our decision depends on the context in which we
are acting–whether we are alone or with other people. In the same way,
we modify our behaviour choices when other people are present, even
when they are only spectators-these are the conclusions of a study
conducted by three economists and neuroscientists of the universities
of Lyon (France), Trento (Italy) and Minnesota (USA).

The researchers studied how social ranking affects choice behaviour in
an article, which will be published in the online, open-access journal PLoS ONE
on Wednesday, October 22. They investigated how people evaluate the
outcome of their decision in private versus social contexts and whether
social and private emotions influence monetary decisions in different
ways.

What happens when we are not acting alone, but have to factor in a
social context? The research shows that social emotions linked to a
success or a failure are stronger than in the ‘single actor’ scenario.
Moreover, we behave more boldly in a prudent environment (against a
weak opponent) and more prudently against a bold opponent.

Social competitive emotions are stronger than their private counterpart

Each day, we make decisions and evaluate their consequences and each
time, we fall into the trap of counterfactual thinking, recreating in
our mind all other possible scenarios (along the lines of, "’I would
have been better off choosing the other option’"). The relief resulting
from a good choice can vanish if we realize that another choice would
have been better still; when this happens, we regret our choice. Relief
and regret are emotions linked to an evaluation of a choice behaviour,
so they arise from a reasoning process and they play an key role in
evaluating our behaviours and in adjusting future ones.

What happens when we are
placed in a social context? Usually, we feel envy (the social analogue
of regret) when we are comparing our negative situation to the positive
situation of another. Conversely, when we are the winner, it appears
there is no room for empathy; gloating always prevails. In a social
context, as the researchers report, emotional responses to a choice
(either good or bad) will be enhanced due to social comparison: social
emotions have stronger effects than their private counterparts.
Moreover, they operate differently, and they affect our behaviour in a
deeper way.

If, in a private context, failures matter more than successes, in social situation, competitive spirit prevails.

"In many situations, the most important thing is to gain the upper hand
over the others; in this case, gloating is understandable," said
Giorgio Coricelli, researcher at the Center for Mind Brain Sciences of
the University of Trento and the Institut des Sciences Cognitives,
Centre de Neuroscience Cognitive, CNRS at the University of Lyon, "but
contexts are always changing and so is the point of view: the important
thing to do is to minimize envy; that is the social difference between
us and the others. For that, I need to adjust my behaviour to that of
others. Nonetheless, when a human is placed in a social context, even
with a minimal interaction and without any induced competition element,
he immediately sees his status concern prevail. This fact has serious
implications on human choice behaviour."

In the study, the subjects played a lottery game but their actions
never influenced the outcome of the game for the others. Emotional
arousal was assessed by recording the skin conductance responses (SCR)
and heart rate of all participants during the entire experiment.
Despite the absence of any competitive element, gloating looms larger
than envy. On the contrary, in the single player scenario, the regret
over a failure is stronger than the relief over a success. Social
emotions were thus shown to operate differently from private ones:
social competitive emotions are stronger that the private counterparts
even when in the lab and there is no induced competitive element. Data
on self-reporting rates and physiological responses were extremely
consistent in their experiment.

Effect of the environment on choices: social and private

Participants in the study chose among lotteries with different levels
of risk and faced opponents with different gaming styles. Again,
satisfaction for a victory was greater than regret for a defeat when in
a social context, contrary to what happens in a private context. This
is the economic analogue of the dominance complementarity observed in
postural relationship, where a dominant posture is likely to induce a
submissive one, and vice-versa. We produce the most rewarding behaviour
in a competitive environment.

To explain the difference between the relative weight of gains and
losses in private and social environments one may consider the
different impact of the outcome in the two scenarios. For example, in
the private context, an individual may find that her survival is at
stake. On the other hand, climbing the social ladder and becoming
dominant could result in having many sexual and food advantages. If
ranking first is much better than ranking second, the difference among
the lower ranks is not as significant. The behaviour is therefore
driven more by the prospect of winning than by the fear of losing.
Research in this field continues, with the analysis of the role of
complex emotions (regret and envy) in patients with frontal lobe lesion
and in autistics, with behavioural and magnetic resonance data.

"Interdependent Utilities: How Social Ranking Affects Choice Behavior."

Bault N, Coricelli G, Rustichini A (2008)

PLoS ONE 3(10): e3477. doi:10.1371/journal.pone.0003477

Click here to view article online

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