Losers Take All

How strong is envy? New research from a top economist provides a startling answer.
by Jill Neimark

JULY/AUGUST 2002-In his 1967 hit ballad "Everybody Loves a Winner," songwriter William Bell mourned that "when you lose, you lose alone."

Were Bell alive today, he'd probably offer the opposite sentiment: "Everybody hates a winner, and when you lose, you lose together." According to new research, we not only envy winners, we often punish them-even at our own expense.

"I may have unearthed the dark side of human nature," says economist Andrew Oswald of Warwick University in England. Oswald's ingenious study, conducted with colleague Daniel Zizzo of Oxford University, tested how willing we are to burn away others' wealth, even when we have to give up our own to do so. Participants played an anonymous betting game at a computer terminal. The money they received to play the game-along with any winnings-was theirs to keep. As they played, the screen showed exactly how much other players were winning. At the end, players could secretly burn away other people's money-but only if they burned 25 percent of their own money, too.

Of 116 study participants-playing several games in anonymous groups of four-almost two-thirds chose to burn other players' winnings. And this was in spite of the high cost-burn a dollar of another's money, lose 25 cents of your own. Losers punished winners, which might seem to be motivated by a kind of perverse logic, driven by envy and resentment. But even winners punished others, though they punished both poor and rich alike-reducing their own windfalls.

"We were shocked by how much people were willing to hurt themselves to burn other people's money," Oswald says. "We really thought that a cost of 25 percent would kill off all destructive behavior, but it didn't. And most people didn't give very clear explanations as to why they'd done it. I don't believe they fully understood what they were feeling. This is a drive, not a cool-headed, rational choice."

The drive, Oswald speculates, may have to do with status, and the fact that relative rank is an important part of life. "We're very driven by a concern about rank, and there is only so much rank to go around in any society. Wages, for instance, are relative. In my own life, on a university faculty, I find that my colleagues are incredibly interested in what others are earning. It goes back to rank. People are more interested in rank than in having resources, per se. Status comes from where you are in the ranking." But how does relative rank account for winners punishing all others, rather than simply exulting in their top status? Oswald speculates that winners struck preemptively, in order to preserve their rank: They expected the losers to punish them and so they punished the losers first.

Oswald seems to have uncovered, in a stark way, something we all subconsciously recognize: flaunting our success may rouse deep envy in others. A tendency to "play down" one's winnings is evident in the speeches of Nobel Prize winners, says Pam Benoit, a communication professor at the University of Missouri-Columbia and author of Telling the Success Story: Acclaiming and Disclaiming Discourse (State University of New York Press, 1997). When Benoit studied individual success stories, she found that Nobel Prize winners tend to detract from their success in their acceptance speeches. "They just won the Nobel Prize, and that has such enormous status they don't need to enhance it," Benoit says. "So they talk about the others who were responsible, the people who worked in their labs, the scientists whose shoulders they stand upon. They appear very modest."

Research shows that children learn the benefits of modesty by age eight. And a 2002 study conducted by Dawn Watling and Robin Banerjee of the University of Sussex in England seems to show that modesty and rank are indeed linked. Ninety-two children between ages eight and eleven were shown social scenarios that reflected modest or immodest behavior. Researchers then asked the children whether the behavior was a good thing and why. In scenes where children interacted with their peers, the kids thought modest behavior was good: They believed they'd be better liked that way. When interacting with adults, however, who rank higher than children, confidence and boasting were seen as a useful strategy. "Children probably learn modesty from their peers, not from adults," Watling concludes. "Now we want to study whether children feel they should act modest with peers, but confident with older children."

Oswald's study gives us uneasy insight into the urge to punish winners, and yet it raises as many questions as it answers. For instance, will a majority still burn money if it costs half of their own, or three quarters? And what if the game was played for large sums of money? "I don't believe that would make a difference," Oswald says, "but I'd like to find out. We know that at any given time, individuals enjoy moving up in a ranking. In contrast, if an entire society is lifted up by a wave of prosperity, no given individual feels much happier. What if we ran this study in a very poor, developing country, where the sums we offer are worth a fortune, to see if participants were cooler-headed?"

Oswald wonders if there is a way to harness or foster a kind of group spirit that will counteract the urge to punish.

"In my lab, half of all the potential [financial] resources were destroyed," Oswald says, "and so the group as a whole became poorer, because the concern for rank overwhelmed them. Maybe I could design a study where they shared knowledge and cooperation, so that the group as a whole came away with more money. The question is, can we develop some set of institutions that gets us to a group outcome where everyone is richer? This is a very important issue for society."

Swiss economist Ernst Fehr agrees. An expert on altruism and punishment at the University of Zurich, Fehr says that people compete for rank, and that relative rank is important for survival. However, he also has found that humans grouped together will cooperate and, as a result, often will punish defectors, or those individuals who don't cooperate. This punishment can be costly for an individual, but enhances the survival of the group. Fehr dubs it altruistic punishment and considers it a major motivator in social interaction. "When we run experiments where people can stay together, cooperation rates are much higher than if people interact with strangers," Fehr says.

But what of those winners at the very top who, rather than preemptively punishing others, become philanthropists to society at large? In his 1889 essay "The Gospel of Wealth," magnate Andrew Carnegie suggested that the duty of a rich man was to live modestly, provide moderately for his dependents, and regard himself as "the mere agent and trustee for his poorer brethren," administering his fortune to produce the greatest gain for the community as a whole. This seems a form of pure altruism, and science has long debated why it exists.

Sometimes winners give all, rather than take all: but the answer to that particular mystery may lie within the human heart rather than the laboratory.

Originally published in Science & Spirit magazine.