From 2014...The Price of Envy—An Experimental Investigation of Spiteful Behavior

From 2014...The Price of Envy—An Experimental Investigation of Spiteful Behavior. Inga Wobker. Managerial and Decision Economics, April 21 2014. https://doi.org/10.1002/mde.2672

Abstract: When receiving less resources than a competitor, envy may be evoked that may result in spiteful behavior. This paper applies evolutionary theory to understand envy and its outcomes. A theoretical framework is developed that is based on the cause–effect relationships of unequal outcomes, envy, defection of cooperation, and welfare loss. To test this framework, an experiment with 136 participants is run. The results confirm that receiving less than another can indeed lead to experiences of envy and defection of future cooperation, producing a welfare loss of one‐sixth.

4.1. Discussion

The overall objective of this research was to study envyand its influence on spiteful behavior in an experimentalsetting with economic relevance. Evolutionary theoryprovided a supportive framework for studying the issue.

An unequal distribution of resources led to feelingsof envy in those who were worse off, which is in linewith prior literature (Hill and Buss, 2008b; Leach,2008). One-third of the losers chose to act spitefullyand reduce the other players’ balances. In a similar experiment by Celse (2009), participants with different levels of endowment could reduce the other players’ payoff at own cost. Of the participants with a lowerendowment than their opponents (equal to the losers inthis experiment), 31.9% reduced the other player’s balance at a personal cost. This may indicate that the rateof approximately one-third of the agents who are willing to behave spitefully is stably distributed in the population. However, one has to bear in mind that different expectations about the outcomes of the resource division probably will moderate the satisfaction with the outcome. For example, if an actor only expects a fraction of the outcome of what the others obtain, this outcome of the resource division is, however, still profitable for her or him, when actually receiving less than others, in this case, this does not trigger envy.

Although spiteful behavior as a reaction to resourcedeficiencies may be the best individual strategy (Hilland Buss, 2008b), it is certainly not the best strategy for a group or organization as a whole, as it produces welfare losses (Garay and Móri, 2011). Recognizing the impact of envy for agents may lead to new understandings of inefficient organizations and welfare losses and may help to develop approaches that better manage the destructive influence of emotions (more precisely,social emotions—those triggered by social comparisons), on behavior (Manner and Gowdy, 2008).

Agents who acted spitefully stated several motivations for their actions. Their attitude—that if they could not have the money, then no one should have it—is a common feature of envy (Feather and Nairn, 2005) and supports the evolutionary perspective that when itis not possible for a person to obtain the resource, nocompetitor should have it either, in order to preserve relative fitness (Hill and Buss, 2008a, 2008b). Some agents expressed the opinion that the distribution wasunjust as insofar that the opposing agents won and that they themselves did not. This attitude corresponds tothe traditional scholarly view that subjective assump-tions of undeserved advantage trigger envy (Featherand Sherman, 2002; Feather and Nairn, 2005; Smithand Kim, 2007), which, in turn, triggers ill will. If an agent is observed to have something that he or sheshould not have—even though this state of not deserving may be very subjective—it is understandable that the envious agent would feel hostile toward that enviedagent (Smithet al., 1994). Motivation that arises fromreasons of distributive justice is a very subjective response. Both agents had exactly the same chance of winning, so no objective criteria of fairness have been corrupted. Retaliation of the winner could be interpretedas a punishment for a defection of equity (Xiao andHouser, 2005; Axelrod and Hamilton, 2006). When an agent reduces the other agent’s prize and explains the decision on the simple basis that it is an option of the game, the stated motivation can be interpreted as apossible expression of disguised envy. A logical hypothesis for this behavior is that the agents neededto justify the reduction to themselves and to the experimenter and wanted to blame their desire to reduce on features of the game rather than on their envy.

5. CONCLUSION
The overall objective of this research was to studythe influence of envy on spiteful behavior and to understand the negative effects of envy on inter-firm and intra-firm relations. The evolutionary theory provided a supportive framework for studying the issue. In the study designed, agents played a lottery that provided them with unequal distribution and could subsequently create financial harm for each other at their own cost. One-third of thelosers in the lottery acted spitefully and reducedthe winners’balances by half. The observed welfare losses accumulated to one-seventh of thetotal income value.Addressing the broader aspects of envy, in orderto fully understand the nature of envy and its implications for relationships, more research is needed (Smith and Kim, 2007). Systematically integrating envy and other other-regarding preferences into economic modeling can provide a refreshing viewpoint in the investigation of human behavior (Horstet al., 2006; Kirman and Teschl, 2010). It will be interesting to see whether, and in what ways, this study will help to motivate researcher sto focus research on this fascinating emotion in this field—where, despite the relevance of inter-firm and intra-firm relations, the concept of envy is still neglected. It may be hoped for that adopting an evolutionary perspective on these questions will lead to more effective management strategies fo rdealing with envy