‘Money Isn’t Everything’

Thanks to Tyler Cowen over at Marginal Revolution for pointing out an article in The Economist about a study that provides valuable insight into men’s sometimes risky negotiating tactics. The study was conducted by economist Terence Burnham of Harvard University, who asked male students to play the ultimatum game, in order to learn why men often reject one of the basic principles of economics — that any amount of money, however small, is worth having. Apparently, testosterone is to blame:

Dr. Burnham’s research budget ran to a bunch of $40 games. When there are many rounds in the ultimatum game, players learn to split the money more or less equally. But Dr. Burnham was interested in a game of only one round. In this game, which the players knew in advance was final and could thus not affect future outcomes, proposers could choose only between offering the other player $25 (i.e., more than half the total) or $5. Responders could accept or reject the offer as usual. Those results recorded, Dr. Burnham took saliva samples from all the students and compared the testosterone levels assessed from those samples with decisions made in the one-round game.

As he describes in the Proceedings of the Royal Society, the responders who rejected a low final offer had an average testosterone level more than 50% higher than the average of those who accepted. Five of the seven men with the highest testosterone levels in the study rejected a $5 ultimate offer but only one of the 19 others made the same decision.

Burnham’s conclusion: Men would rather forgo a financial windfall than see another man get ahead. And men think women are spiteful?