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“Dirty Money: The Role of Moral History in Economic Judgments”

Recently in the sister blog . . . Arber Tasimi and his coauthor write:

Although traditional economic models posit that money is fungible, psychological research abounds with examples that deviate from this assumption. Across eight experiments, we provide evidence that people construe physical currency as carrying traces of its moral history. In Experiments 1 and 2, people report being less likely to want money with negative moral history (i.e., stolen money). Experiments 3–5 provide evidence against an alternative account that people’s judgments merely reflect beliefs about the consequences of accepting stolen money rather than moral sensitivity. Experiment 6 examines whether an aversion to stolen money may reflect con- tamination concerns, and Experiment 7 indicates that people report they would donate stolen money, thereby counteracting its negative history with a positive act. Finally, Experiment 8 demonstrates that, even in their recall of actual events, people report a reduced tendency to accept tainted money. Altogether, these findings suggest a robust tendency to evaluate money based on its moral history, even though it is designed to participate in exchanges that effectively erase its origins.

I’m not a big fan of the graphs in this paper (and don’t get me started on the tables!), but the experiments are great. I love this stuff.

20 Comments

  1. Eric Loken says:

    I feel news over the last couple of years (and not just election news) has really shown the power of moral outrage to trump almost anything. Where is the economic “rational human”? BTW that was some quick reviewing and accepting for the article. Your sister writes a good first draft – or maybe a dirty dollar or two changed hands :)

  2. Z says:

    I don’t think the authors excluded what I consider the most plausible explanation for the increased propensity to accept money in the bad-giver/neutral-money scenario. I think people know that it’s considered wrong to benefit even indirectly from criminal acts, and thus reject money in the bad-giver/bad-money scenario. But they like money and/or are intellectually lazy. Thus they are willing to accept even a silly rationalization (i.e. these are the not the physically stolen bills) as justification for accepting money from a thief. I think this is why they accept the money in the bad-giver/neutral-money scenario. To test this hypothesis, I would like to see another scenario tested which we can call bad-giver/bad-money/silly-rationalization. In this scenario, subjects are offered money from a thief in the form of the physical bills that he stole, but they’re told that the thief also donated some money to charity last year. I predict that the response to this scenario would be similar to the bad-giver/neutral-money scenario.

  3. Jonathan says:

    Yep, the extent to which money can be treated as fungible is similar to the extent to which a cow may be treated as spherical.

    Happy holidays!

  4. Susan says:

    Thanks for posting this, Andy!
    I like Z’s idea; we should test it.

  5. Paul Alper says:

    There is a famous phrase about tainted money but where did it originate?

    “The trouble with tainted money is there t’aint enough.”

  6. afinetheorem says:

    The way non-economists always misunderstand the theoretical assumptions of economics is so frustrating. What economist would deny that people don’t like “dirty” money, “blood diamonds”, etc.? But there is a clear difference between dirty money and “dirty” goods. Consider the following: you are asked if you want to buy a painting, but you know that the 3rd to last owner stole it. I think few people would be interested. Alternatively, you are asked if you will accept some bills, physically stolen by the 3rd to last owner. Imagine further than in either case the thief has been caught and punished. In the case of the painting, most people would say the actual object belongs to the person who was robbed. In the case of the bills, I can’t imagine most people would care that those physical bills were part of a robbery years before, especially if the person who was robbed had been made whole with other physical bills. That is what it means for something to be fungible.

    (Another way to put this: the auto dealership will absolutely check to see if the car you bring in to trade has been stolen. They won’t check, and couldn’t even if they wanted to, whether the bills you pay for your new car with were stolen, by you or someone earlier in their life.)

    • anon says:

      >The way non-economists always misunderstand the theoretical assumptions of economics is so frustrating.

      It’s also frustrating when economists react to just about every criticism of assumptions with a variant of “we all know this, no one believes otherwise”, but then the typical work horse models they use actually make these assumptions anyway and they are not unimportant in generating key qualitative results.

  7. I once sold my car to someone that paid me in cash, 5s, 10s and 20s, all which looked much older than their age (but not counterfeit). I had my suspicions on their origins, and some discomfort. This discomfort would surely have shown up in a 7-point Likert scale. But, I sold the car anyway. Who was I to judge?

    Not sure if I would have accepted less if I knew for sure that the money was clean.

    This suggests a field study to test the robustness of these results: the authors could go on craigslist and make some take-it-or-leave it offers with “clean” cash, and “dirty” cash…

  8. Dean Eckles says:

    The related work by Newman et al., cited in this paper, is fascinating. Here’s one figure and summary:
    http://www.smithsonianmag.com/science-nature/science-explores-our-magical-belief-power-celebrity-180949852/

  9. Slugger says:

    I understand the idea that inanimate objects don’t contain evil and have thought that people who shunned buying a house where something bad happened were silly. However, I remember an episode of The Sopranos where Carmela goes to a psychologist who counsels her to leave Tony and his life. She offers to pay the shrink, but he demurs saying that he can’t accept “blood money.” I was struck by this.

  10. Anon says:

    “Thus, gift money, found money, earned money, and illegally obtained money may be expended on different purchases (e.g., gift money is spent more on frivolous goods; Hoigard & Finstad, 1992; Kardos & Castano, 2012; Levav & McGraw, 2009; Stellar & Willer, 2014; Zelizer, 1994). These results indicate that the meaning of money is importantly linked to its source. The current studies examine another key way that source influences how people reason about money by asking whether physical currency is treated as inheriting moral valence from its past.”

    Very clever lit review strategy: cite several pieces showing moral associations affect perception of the value of money, obfuscate these findings, then claim to demonstrate for first time that moral associations affect perception of the value of money. Never reefer to this prior work again, replicate their findings, hope reviewers don’t look up your references.

    • Andrew says:

      Anon:

      The authors write, “The current studies examine another key way that source influences how people reason about money by asking whether physical currency is treated as inheriting moral valence from its past. . . . An open question is whether monetary tokens are likewise thought to be contaminated by, and carry traces of, their moral history.” And that is what their experiments address. It’s fine that there is earlier, related literature: it’s generally a mistake in social science to think of any idea as entirely new. Perhaps you’re right that the authors could’ve done more in their conclusion to connect their findings to the literature. I disagree with your implication that a lack of clarity in a literature review represents a strategy of obfuscation.

  11. Anon says:

    Reviewing Studies 4a and 4b of Levav and McGraw 2009 and Stellar and Willer 2014 (and to a lesser extent Kardos & Castano, 2012), I’m struggling to see how their research represents “another key way” and work on “an open question.” These prior studies all examine the effects of moral history on the perceived value of currency, but the write-up suggests they do not. It’s more than fine to replicate and extent new work, but you should be clear that’s what you’re doing.

    • Andrew says:

      Anon:

      I don’t know this area of research at all and it well could be that this paper could do a better job of discussing the literature. But then I think it would be appropriate for you to say just that, rather than going on about clever obfuscation.

  12. Anon says:

    Sorry if my last post left this ambiguous. I’m saying this paper should have more accurately identified its contribution vis-a-vis prior research.

    Feel free to review the references and come to a different conclusion. Of course I’d prefer to be wrong!

    • Andrew says:

      Anon:

      Whereas previous work (e.g., Levav & Mcgraw; Stellar & Willer) demonstrates that source influences how people construe money, it often does not address whether moral history attaches to the physical currency itself, or whether instead it attaches to a mental quantity of the relevant funds. For example, if one possesses a stolen $1 bill, is the stolen bill itself tainted, or just a mental tally of the amount, unliked to the bill itself? The studies in the above-linked paper provide a strong case for the former, whereas previous work provides a compelling case for the latter.

      In short, this work highlights the importance of object history in guiding people’s understanding of the material world, even for things like money that are designed to participate in exchanges that erase their origins.

      The earlier papers didn’t disentangle moral association from moral history. Someone reading the above-linked paper quickly without that distinction in mind might think, “Hey, other people already showed morality matters for money!” without realizing that there’s a major distinction that was unaddressed by past research. (This is not to disrespect the past research, which certainly made important contributions.) With this in mind, part of what’s striking about the new data is not only that people don’t want the stolen dollar, but also that they’re relatively fine with the non-stolen dollar offered by the thief of another dollar!

      Speaking more generally, I do think it’s a challenge to integrate new results into the research literature, in part because there’s so much pressure from journals to demonstrate novelty, and also pressure to keep papers short. So literature review often doesn’t get the space it deserves. Indeed, when you read advice to young researchers on writing papers, you’ll often see suggestions such as, Cut the lit review and get straight to the point!

      • Rahul says:

        >>> it’s a challenge to integrate new results into the research literature<<<

        I'm cynical. The biggest reason it's a challenge is that most of what's touted as "new results" is pretty trivial & uninteresting. If you did indeed do a thorough literature review these authors would have an even harder time justifying publishing whatever they are publishing (in general, not picking on the present study).

        The biggest pressure around is the pressure to publish an article. Whether you have something worthwhile to say or not.

        Thank goodness the papers are short. If I must face crap, much rather it be in smaller doses!

        • Andrew says:

          Rahul:

          I don’t think the paper linked above is “uninteresting,” nor do I think it’s “crap.” Is it trivial? Sure, it’s trivial compared to the big things. They’re not splitting the atom or even discovering a Stroop effect. But I think it’s just fine for people to publish small and clearly defined research contributions. That’s what a lot of science is all about. Indeed, I’m annoyed by the attitude of tabloid journals such as PPNAS that push authors to shout the importance of their work. Workaday science is just fine with me. It’s great that there are some Andrew Wiles types who spend decades on big things, and I think it’s also great that there are people like me who work on lots of problems, make many small contributions along with the occasional big thing. Indeed, I don’t think I’d have had a chance at making any of my major contributions, had I not had space in my career to work on lots of little things. Stop giving academic credit for the little things and you’ll squeeze out important work too, that’s my take on all this.

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