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Why revenge is so sweet — Pop Economics

Why revenge is so sweet

by Pop on October 9, 2010

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Yet another reason we’re not rational beings

A few years ago, Swiss researcher Ernst Fehr ran an experiment to see how far we’re willing to go to punish bad behavior.

The game went like this. Player A and Player B were given $10 each. Player A was given the option of giving his money to Player B, and if he did the money would quadruple, making Player B’s take $50 in total. Player B could then chose to keep the money or give some money back to A.

In a completely rational world, Player B would keep the entire $50, leaving A with nothing. Player A could easily expect that outcome, so he probably wouldn’t give B the money in the first place.

However most of the time, Player A handed the money over, with the expectation that he get half ($25) back. Most of the time, Player B obliged.

But if Player B decided to screw Player A, the Swiss researchers gave him an option, not typical of all the other variations of the “trust game” used before. Player A could pay cash out of his own pocket to the researcher, and in exchange the researcher would take money away from Player B’s prize at a ratio of $2 for every $1 paid. In other words, Player A could pay $10 to have $20 taken away from Player B.

A rational person, even after being screwed out of $25, wouldn’t pay. It just means he loses more cash. But most test subjects tended to take revenge.

While they considered the decision, the researchers gave their brains a PET scan. The subjects who decided to exact revenge showed a lot of activity in the dorsal striatum of their brains, an area associated with satisfaction. In fact, when the researchers varied how much it would cost Subject A to punish Subject B, those with more activity in that area of their brains were the most willing to pay more.

Revenge really is sweet.

Could that be why we’re all against “bailouts”?

Remember that $700 billion bailout bill President Bush signed at the height of the financial panic?

At the time, most everyone agreed that the financial world (and by extension, Main Street) would go to Hell if something wasn’t done to keep more banks from falling to pieces. There were a few arguments against the bill—it created a future expectation for banks that bailouts could happen again, for example—but most of the opposition boiled down to this (pulled from a comment at the Washington Post): “Screw the banks as they have gouged us.”

So even though there might have been good, rational reasons not to prop the banks up, I have a sneaking suspicion people just wanted to stick it to the banks, in the same way they stuck it to us. Damn the consequences; We were willing to suffer some pain in a more severe recession if it meant the banks got theirs.

Think about how that compulsion extends to personal revenges. You’ve heard the horror stories of fast food workers doing gross things to the food of customers who are rude to them. The customers likely never even find out that their food was spat in, but somehow the action satisfies the workers anyway, despite the real risk they have of getting caught and fired.

A few months ago, someone became so angry at United Airlines for mishandling his guitar that he spent (probably) dozens of hours creating a music video to ridicule them.

And, of course, there’s this election cycle. Voters seem to want to rush to the polls, not to vote the challenger in, but to vote the incumbent out. Rational? No. The challenger could have even worse policies than the guy in office. But it will sure feel good to stick it to the smug bastard taking your tax dollars.

I’m not going to end this post with a righteous call to give up revenge. After all, it does feel good, and some revenges—like spreading the word about a bad customer experience—cost nothing and might do some good.

Just don’t let yourself be manipulated by revenge to do things you’ll regret later. The anti-incumbent politician just wants your vote. The community bank, that talks about how it wasn’t one of the ones that screwed you, just wants your money. They’re happy to satisfy your thirst for revenge to get it.

P.S. Dan Ariely has a great chapter about revenge in his new book, The Upside of Irrationality. He also has participated in several interviews on the subject.

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{ 5 comments… read them below or add one }

Mikley October 10, 2010 at 9:02 am

“but most of the opposition boiled down to this (pulled from a comment at the Washington Post): “Screw the banks as they have gouged us.””

Really? Your only source for “most of the opposition” argument against the bailout comes from a single comment to an article in the Washington Post?

“I have a sneaking suspicion people just wanted to stick it to the banks”

OK, now I am convinced: your gut reinforces the one comment you found in the Washington Post article. I’m sold. There were plenty of cogent (yes, even rational) arguments against the bailout at the time. You just had to look for them somewhere other than the Washington Post.

As far as the election and the anti-incumbent feelings it is generating: perhaps it’s not about revenge as your “sneaking suspicion” may be telling you. Maybe it’s because the incumbent political class is out of touch with the vast majority of Americans on any number of issues that they claim to represent us on. That doesn’t feel like revenge to me, that feels like the actions of rational and enlightened individuals looking to improve their lives. It feels like trying to hold those in power accountable for their actions. It feels like something a good businessman would do: an employee’s not performing, you fire him/her. (Interesting–related?–observation: it’s a lot tougher to fire a government employee.)

After all, that United Airlines video produced results: the man in question finally received some attention to his plight from airline executives.

This is sloppy, I’ve seen much better from you.

Pop October 10, 2010 at 12:13 pm

Sure, I think there’s room to disagree here. I just picked the Washington Post comment as a representation of thousands of comments at the time. I don’t think it’s really a revolutionary statement to say that many people didn’t want the bailout to happen because it would help the people who hurt the country. You can see a lot of that sentiment being used by both the left and the right in this election…references to fat-cat bankers etc. And no, I don’t think it makes sense to simply “fire” a politician in an election, because by firing him or her, you’re voting someone else in. To take it to an extreme, no matter how much you hate Obama, if he was literally running against Hitler, you wouldn’t vote Obama out to have Hitler in, right? All of this really wasn’t the point of the post though.

Rob Bennett October 11, 2010 at 2:56 pm

A rational person, even after being screwed out of $25, wouldn’t pay. It just means he loses more cash. But most test subjects tended to take revenge.

Calling this human inclination a desire for “revenge” needlessly spins things in a negative way, in my assessment. Why not say that the humans have a desire for justice?

Someone steals a bicycle. The theft is reported. The policeman who takes the call determines that the manpower cost of retrieving the bicycle would surpass the dollar value of the bike. He drops the matter.

A good result? Perhaps to a certain type of economist. Not to the sort of person who understands how civilizations are built and maintained. We are not producer/consumer units. We are people.

I am glad that some of us are capable of the “irrationality” needed to make civilized human life possible.

Rob

MossySF October 11, 2010 at 8:50 pm

The desire for revenge/justice/fairness has been observed in other social animals like chimpanzees and dogs. Hence, this desire in us is very likely evolutionary. Those people/animals with such tendencies work better in social settings and have better odds of passing on their genes.

Sharkey October 12, 2010 at 10:44 am

Pop:

You’re right, it would be irrational for Player A to punish Player B in the game you described, which is a single-play game. However, if the game is repeated (or even has the potential of repetition), the punishment serves a purpose. For example: in the game Iterated Prisoner’s Dilemma, a punishing strategy like Tit for Tat is an optimal (deterministic) strategy. The threat of punishment preemptively coerces Player B to behave altruistically, while the enforcement of punishment modifies future behaviour.

There are very few instances of single-play scenarios in human experience, and therefore our psychology isn’t interested in the optimal outcome of those scenarios. Humans deal with other humans on a regular basis, and our psychology reflects that.

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