A Literature Study About Greed And Status Psychology Essay

This literature study focuses on the link between greed and need for status. After research, it can be concluded that need for status is a relative concept. Since people only feel fortunate when they have as much or a little more than the people in their environment. Therefore, seeing what others have is one of the most powerful influences that stirs greater and greater desires. People may not just want what others have but more than others have.

In order to provide the link between need for status and greed, it was necessary to find the relative factors in greed. In this study it is assumed that three facets contribute greed namely, self-interest, materialism and desire for money. All these facets appear to have relative parts. For instance, competitors are individuals who are mainly focused on maximizing their own outcome relative to others. Therefore they always prefer outcomes that are superior to those in their environment. Materialism is defined as the importance a consumer attached to worldly possessions. However, it could also be a competitive striving to have more than others. Materialistic individuals therefore have a desire for other’s possessions, objects, experiences or persons and resent those who own the desired possessions. The desire for money is also relative since monetary value is inherently invaluable. People do not have a scale to sense what amount is “desirable” and what is “undesirable”. Therefore, people rely on external reference (e.g. what others in their environment receive). Based on that information, people use to judge the merit of their own achievements, whereby it is possible to conclude that monetary experience follows the relative pattern people interpret.

Table of content

1. The Seven Deadly Sins

The Seven Deadly Sins have provided gossip, amusement and plots for nearly fifteen centuries (Solomon, 1999). The Seven Deadly Sins, also known as the Capital Vices or Cardinal Sins, have always been popular. However, the dubious “deadly” have caused many speculations (Solomon, 1999: p.7 preface). Pope Gregory the First instituted the classic certification. His list of seven was confirmed and later modified by Saint Thomas of Aquinas. The list survived several centuries and now consists of the following Seven Sins: Wrath, Greed, Sloth, Pride, Lust, Envy and Gluttony (Solomon, 1999 p.2).

1.1 Introduction of the topic

A recent study concluded that The Sins are still encountered in our daily lives, despite their existence for all this time (Frank, 2001). This because they are so deeply rooted in our human nature, that not only they are almost completely unavoidable but people can never seem to limit themselves (Frank, 2001). For example, pressing the snooze button once or twice in the morning before dragging oneself out of bed? Or taking a long shower without consideration for your family members? These are only harmless examples, but sins can also cause more substantial consequences. Lately, greed has been a central subject in the economical news. Amongst others parliamentarians, journalists and prominent business men have been presenting this sin as one of the main causes for the current credit crunch (Bernasek, 2010; Trouw: Economics Department, 2009; Staps, 2008). Furthermore, De Soysa (2002) even claims that greed is the primary motivating factor behind civil wars.

The main question that intrigues me is: why are people greedy? As ultimately humans and not these sins are responsible for causing credit crunches and wars. According to Wenzel (1968), greed arises due to the nature of earth. He stated that the earth is cold and dry and therefore people who lack heat and humidity are exceedingly greedy. Furthermore, when we take a look at Wachtel’s theory (2003), greed is known as a form of self-deception. Here self-deception is a false consciousness in which what really matters is suppressed by a single-minded focus on material wealth (Wachtel, 2003). He also concluded that these days greed is stated as a form of self-interest (Wachtel, 2003). For further understanding, it is necessary to define the many concepts of greed. The following definition is therefore utilized throughout this thesis: greed is a selfish and excessive desire to acquire or possess more than one needs [1] .

1.2 Problem statement

Despite the fact that unwanted situations like credit crunches and wars re-appear, relatively little time is devoted to greed in academic research. Wachtel’s psychoanalytic research (2003) is one of the few clues within the subject. Though, his research is mainly focused on the link between greed, material wealth and money. However, greed is also viewed in other respects. For instance, Frank (1999) concluded that “mutual influence” is another important dimension in the process of greed as well. Mutual influence means that our choices, purchases and feelings are influenced by neighbors and family (Frank, 1999). In order to explain this concept, consider the perception of what “looks right” in clothing. Simply by living in the society, people seem to have an automatic sense about how wide a jacket should be. But when fashion changes over time, people’s perception changes as well (Frank, 1999). Wachtel (2003) made a similar comparison. He said that the envy towards the bigger boat is not reduced by increasing the average size of the vessels. For when all boats get larger, the average person’s assets still feels like “just a boat”.

So, apparently people continuously compare their possessions with others (Wachtel, 2003; Frank, 1999). This could be emphasized with the findings of Duesenberry (1949). He concluded that a concern for status causes people to engage in imitating the consumption standard of those above them in the income hierarchy. But why is status important for people? And what kind of effects does it have on greed? In hopes of finding, the problem definition is stated as follows:

What is the effect of -need for status- on greed?

1.3 Research questions

In order to answer the problem definition three research questions have been formulated:

What is greed?

What is status?

Will status influence greed?

1.4 Conceptual model

After the problem definition and the research questions the following conceptual model has been defined:

Greed

Need for Status

Need for Status (now called status) = One’s position in the world (De Botton, 2004).

Greed = A selfish and excessive desire to acquire or possess more than one needs [2] .

1.5 Academic relevance

There have been several studies about The Seven Deadly Sins, but only a few about greed (Frank, 2001; Solomon, 1999; Wenzel, 1968; Wachtel, 2003). However, there are studies about related topics such as conspicuous consumption, money, materialism and self-interest (Arrow & Dasgupta, 2009; De Botton, 2004; Khan, 2004; Krähmer, 2006; Frank, 1999; Rege, 2006; Richins, 1994; Rucker & Galinsky, 2009; Veblen, 1899). In none of these studies, greed is linked to status. In my opinion status is a missing variable in the concept, which potentially could be the underlying motive for people to keep buying material goods. This makes this thesis academically relevant due to the fact that it may contribute to the further understanding of greed and the impact it potentially has on consumer behavior.

1.6 Managerial relevance

This thesis attempts to contribute to the further understanding of greed. With this obtained knowledge, it is possible to counteract unwanted developments caused by greed, such as credit crunches or civil wars. It could also raise concern and put this subject on the agenda, in order to be able to protect consumers in the future.

1.7 Thesis structure

In chapter 1, the research topic is introduced and explained. The problem definition, conceptual model and research questions are defined as well. Chapter 2 and 3 cover respectively the dependent variable, need for status, and the independent variable, greed. The last chapter describes the conclusions, discussion and recommendations concerning this research. After each chapter, a short conclusion is given for recapitulation and clarification.

2. Need for Status

Distinction and status are amongst others the stronger motivations of human behavior (Truyts, 2010). The importance of distinction as a fundamental dynamic was underlined by Darwin (1871). He introduced sexual selection as a selection tool. He concluded that in order to spread the population, people not only need to survive in their natural and social environment but they also need to be a more attractive partner than their same sex competitors (Truyts, 2010). This is also emphasized in more recent research, for example in sociology. Pierre Bourdieu (1979) pointed social distinction as well as status as a crucial dynamic of the social life.

It is known, that in traditional and mostly ancient societies, status was hard to acquire. But it was also hard to lose status (De Botton, 2004). For example, someone could not stop with being a lord, due to the fact that it is a title that has been given to someone. What mattered was the identity at the stage of birth, because in that time people did not care about one’s achievement (De Botton, 2004). Currently, status rarely depends on someone’s identity. Instead it depends on someone’s performance (De Botton, 2004). But what is status precisely? According to De Botton (2004), status is known as one’s position in the world. Hereby, the world refers to one’s legal or professional standing within a group (e.g. married). Solely, this is a more narrow sense of status since in a broader sense it means one’s value and importance in the eyes of the world (De Botton, 2004).

2.1 Biological evidence for the importance of status

A range of medical and biological evidence testifies that status induces something real to happen in the human body and brain (Truyts, 2010). For example, Long et al. (1982) found in their study that test persons show a higher heart rate and blood pressure when confronted with an experimenter who bears signs of a high status such as a name tag, suit or formal language (Truyts, 2010). But also evolution-based theories suggest that the desire to be perceived as wealthy, attractive and of high status may be built into our genes (Buss, 2005). So part of the desire for status is defined by our genes and this partly suggests that we enjoy status for the sake of status itself (Truyts, 2010). But is this the only reason why people seek status?

2.2 Signaling status

According to Wright (1994) people are always looking for achieving high status in society. But, how do people reach this coveted desire? De Botton (2004) stated that people could generate high status due to their importance, achievement and income. This is also emphasized in the study of Griskevicius, Tybur and Van den Bergh (2010). They stated that high status could be achieved through either dominance or prestige (Griskevicius et al., 2010).

Godoy and his colleagues (2006), concluded that nowadays, people spend time and resources in order to communicate their status to others (Godoy et al., 2006). Several researches have concluded the same thing. In relatively simple economies, people equate status using their resources on displaying their skills as providers of food (Gintis, Smith & Bowles, 2001; Hagen & Bryant, 2003; Hawkes & Bliege Bird, 2002; Henrich & Gil-White, 2001; Scaglion 1999; Sosis, 2003). This while in more industrialized economies, people associate status with earnings and they signal their potential through public displays of wealth and income (Godoy et al., 2006). This is also emphasized in several other researches. Because in order to communicate status, people rely on several strategies including producing or consuming goods and services (Bliege Bird & Bird, 1997; Bliege Bird & Smith, 2005; Blurton-Jones, 1984; Patton, 2005; Smith & Bliege Bird, 2000; Wilson, 1998; Winterhalder, 1996). This is also emphasized in a recent paper of Heffetz (2004). He noted that, because people are members of social groups they derive satisfaction both from the direct act of individual consumption and from how others perceive their individual consumption (Godoy et al., 2006).

2.3 Status and “the others”

Duesenberry (1949) stated that eventually everyone is looking for more status than other people in their environment. In order to test this theory, he used households as respondents. Afterwards, he concluded that households not only care about their own consumption level but also about their consumption level relative to others (Leibenstein, 1950). This because, according to De Botton (2004), Duesenberry (1949) and Leibenstein (1950), people only feel fortunate when they have as much or a slightly more than the people they grow up with, work alongside or have as a friend. For example, when all people are small they will not be troubled by the questions of size (De Botton, 2004). But if others are taller, people are eligible to feel dissatisfied (De Botton, 2004). It therefore can be concluded that people only envy members of their reference group (De Botton, 2004).

Hereby, Wachtel (2003) concluded that seeing what others have is one of the most powerful influences that drives greater and greater desires. People may not just want what others have but more than others have. Or more for mores’ sake, regardless of any able need on their part (Wachtel, 2003: p.105). In academic research, this is referred to as relative position.

2.4 Relative position

The importance of relative position has a long history in economic theory. Veblen (1899) introduced the concept conspicuous consumption and conspicuous leisure. This emphasized the importance of actions designed to display one’s relative position in society (Veblen, 1899). Galbraith (1958) stated that most consumer demands do not stern from innate needs, but are largely determined by society. More recently, Duesenberry (1949) used the idea of the ‘demonstration effect’ to explain how a family’s consumption is influenced by the purchases of its neighbors. However, the most comprehensive and recent exploration about relative standing, is written by Robert Frank (1985). He concluded that position externalities occur when a person’s action alters an important frame of reference for others (Frank, 1991). Hereby, the so called ‘positional treadmill’ refers to the process by which each person strives to gain advantage but since all are trying to get ahead, all remain in the same relative position (Frank, 1985).

People care about their relative position in society for many reasons. For example a high standing in society can yield respect, admiration and power (Solnick & Hemenway, 1998). Hereby, Solnick and Hemenway (1998) stated that feeling good in society is typically more affected by the relative positions than by absolute wealth. Therefore, envy is one of the reasons why individuals care about their relative status (Solnick & Hemenway, 1998). For example, Bannerjee (1990) stated that it seems unquestionable that for some people, the pleasure they get out of a particular consumption will be less if they feel that everybody around them has more than they have. However, when they feel that they are on par with the rest of their group they feel better (Bannerjee, 1990). Hereby Frank (1985) declared that someone whose close associates all earn $50.000 a year is likely to feel actively dissatisfied with his material standard of living if his own salary is only $40.000. Yet, the same person would feel good, if his closest associates would not earn $50.000 but $30.000 a year (Frank, 1985). This is also stressed in a number of literature studies, while using experiments called “stated preference research”.

2.5 Stated preference research

Stated preference research puts respondents on a hypothetical spot and asks them to state their preference for the option they believe would maximize their own interests (Truyts, 2010). For example, Solnick and Hemenway (1998) asked their respondents to choose between two companies. A is the more relative company, in which the respondent is worse off in absolute terms but better off than the others. B is the more absolute company where a respondent is better off in absolute terms, but worse off than others. Solnick and Hemenway (1998) made the following distinction:

A: Your yearly income is $50,000; others earn $25,000

B: Your yearly income is $100,000; others earn $200,000

After the experiment, it could be concluded that 80% of the respondents prefer the relative case A (Truyts, 2010). A similar experiment was attempted by Tversky and Griffin (1991). They let respondents choose between jobs at a magazine. Hereby one earns at magazine C, a salary of $35,000 and others $38,000. By magazine D one earns $33,000 and others $30,000. Tversky and Griffin report that 85% of the respondents prefer magazine C, but that in a second experiment 64% believe to be happier at magazine D.

2.6 Conclusion

Part of our desire for status is defined by our genes. But there are also other reasons, why people want to achieve high status. These days, people are a part of a social group. They therefore derive satisfaction both from the individual consumption and from how others perceive their individual consumption. According to several studies, people only feel fortunate when they have as much or slightly more than the people they grow up with, work alongside or have as a friend. It therefore can be concluded that seeing what others have, is one of the most powerful influences that stirs greater and greater desires. People may not just want what others have but more than others have. Or more for mores’ sake, regardless of any able need on their part.

3. Greed

3.1 Avarice’s arise

Greed is a vice, which exists for a long time (Childs, 2000). Formerly, it was known as avarice and it dates from the time of the ancient Egyptians. In 2400 B.C.E. they stated: “beware an act of avarice, it is a bad and incurable disease” (Childs, 2000). Of course, today people do not believe this kind of warnings. However, the declaration from the movie Wall Street (1987) is memorable. Its statement, “greed is good”, has become a mantra for amongst others the American lifestyle (Childs, 2000). These days, CEO’s want more money and the kids want more electronic stuff. However, it is stated that greed’s excess is not necessarily in the amount of money or goods acquired (Childs, 2000). Childs concluded that although, frequently such correlations may appear wealth is not always correlated with greed and greed is not always correlated with wealth (Childs, 2000). According to Childs, the excess of greed is in its excessive self-concern and excessive self-enlargement. He also stated that there are three facets to human greed. First of all it is the excessive desire for goods and wealth. Secondly it is the inordinate desire for acquiring and hoarding money. And last but not least, it is closely related to greediness, which includes the desire for the possessions of others (Childs, 2000).

3.1 Greed and its facets

Although greed exists ever since, little academic research has been done about the subject. Therefore it is necessary to stress that in academic literature, greed is mainly approached by looking at related facets. For example, Wachtel (2003) found a relationship between greed and desire for money. This while Childs (2000) found three related facets of human greed namely; desire for goods/wealth, desire for money and greediness. Though, it is also stated that greed’s excessiveness lies in its self-concern and self-enlargement (Childs, 2000) which is also retrievable in the definition of greed. According to several dictionaries, greed is a selfish and excessive desire to acquire or possess more than one needs [3] .

Based on these theories, the facets; desire for money, materialism (for desire for goods/wealth) and self-interest (for selfishness/self concern and self-enlargement) will be discussed in the upcoming chapters. Currently, it is assumed that these three facets altogether contribute greed (Wachtel, 2003; Childs, 2000).

3.3 Chapter structure

This thesis mainly focuses on whether there is a relationship between greed and need for status. The literature study in chapter two already showed that status is relative concept. This implies that for reaching consistency in this thesis, it is necessary to look at the facets in a relative way. Therefore, a -status- paragraph is included in each chapter which provides the link with need for status.

4. Self-interest

Once, Aristotle wrote “the good man should be a lover of himself for he will both profit himself by doing noble acts and will benefit his fellows” (Aristotle, 1987). This statement implies that only if someone loves himself, he can help others. Striking is that time changes values, opinions and assumptions. Paul, Miller and Paul (1997) concluded that nowadays the concern for one’s own interest is considered a nonmoral issue, while concerns for the interest of others are considered obvious. Since, people are trying to find a proper balance between the pursuit of one’s own interest and the good of others (Paul et al., 1997). Moreover, Van Dijk, De Cremer and Handgraaf (2004) claimed that in situations of social interdependence, people vary explicitly in their expressions and acts. For example, some people seldom cooperate genuinely. They only help others when it serves their self-interest (Van Dijk, De Cremer, & Handgraaf, 2004). But how come, that people are so reciprocally different in their behavior? According to research, this is due to a person’s social value orientation.

4.1 Social value orientation

Social value orientation is defined as the individual difference in the way people evaluate outcomes for themselves as opposed to others (Messick & McClintock, 1968). A number of social values have been identified but usually two opposing orientations are used. Namely the proself and prosocial orientation (e.g. Declerck & Bogaert, 2008; Knight & Dubro, 1984). In 1978, Kelley and Thibaut presented an analysis about social value orientation. They concluded that the difference between prosocial and proself is partially caused by social interactions (Kelley & Thibaut, 1978). Another important difference between prosocials and proselfs is known as the triangle hypothesis. Hereby, Iedema and Poppe (1995) attempted to identify how these two groups scope the social world. Their hypothesis suggests that prosocials have a more heterogeneous scope on the social world and they assume that others can have either the same or different social value orientations (Iedema & Poppe, 1995). In contrast, proselfs tend to hold a more homogeneous scope on others. They believe that all people have the same social value orientation namely proself (Iedema & Poppe, 1995). Therefore, the proselfs will make self-serving choices as they believe that the people in their environment will do the same (Iedema & Poppe, 1995). Now we know that there are differences between the two orientations but what are the differences when it comes to the need for status?

4.2 Prosocials and status

Research showed that status can be achieved either through dominance (e.g. force) or prestige (Griskevicius et al., 2010; Henrich & Gil-White, 2001). When talking about prosocials, we focus on status achieved through prestige. Meaning that status is gained through freely conferred appreciation (Henrich & Gil-White, 2001). According to several theories, prosocials always tend to maximize outcomes for both themselves and others (e.g. Van Lange, Otten, Bruin & Joireman, 1997). This is also evident in their behavior because prosocials always try to minimize differences between themselves and others (Van Lange et al.,1997). Griskevicius (2010) therefore concluded that prosocial behavior can have important functional consequences (Griskevicius, 2010). For instance, engaging in environmental conservation can build a prosocial reputation (Semmann, Krambeck & Milinski, 2005; Wedekind & Braithwaite, 2002). Having a reputation as a cooperative and helpful group member, can be extremely valuable for that such individuals are not only seen as more trustworthy (Barclay, 2004) but they are more desirable as friends and romantic partners (Cottrel, Neunenberg & Li, 2007; Griskevicius et.al 2007; Iredale, Van Vught & Dunbar, 2008; Miller, 2007; Stiff & Van Vugt, 2008). But also, self sacrifice for the benefit of a group of strangers has been shown to increase the individuals’ status in a group (Gurven, Allen-Arave, Hill & Hurtado, 2000; Hardy & Van Vugt, 2006; Milinski, Semmann & Kranbeck, 2002). Thus, being prosocial is associated with status in a group and therefore, if individuals desire to have positions of power, prosocial behavior may be a viable strategy for attaining status (Griskevicius et al. 2010).

4.3 Proselfs and status

In contrast with prosocials, proselfs tend to only maximize outcomes for themselves (Van Lange, Otten, Bruin & Joireman , 1997). In most theories, the proselfs are subdivided in two categories namely; individualists and competitors (e.g. Van Lange et al., 1997). Individualists tend to maximize their own outcomes with little or no regard to others. They are only concentrated on their own goals and they do not respond well to the well-being of other people (Van Lange, Agnew, Harinck and Steemers, 1997). This appears because individualists are not interested in long-term benefits. Competitors also tend to only maximize outcomes for themselves. However, the difference with individualists is that competitors are ultimately seeking for relative advantage over others (Van Lange, Otten, et al., 1997).

Therefore, they generally exhibit low levels of sacrifice and they are most concerned with not being exploited by their partners (Van Lange, Agnew et al., 1997). Competitors are also not willing to engage in prosocial behavior (Kuhlman & Marshello, 1975; Sattler & Kerr, 1991).

Not even if they could benefit themselves in the long haul. In fact, Van Lange, Liebrand, Messick and Wilke (1992) reported that competitors may refuse to accommodate their behavior to the cooperative but punitive opponent because a tie cannot satisfy their real motive of outdoing the other (Van Lange et al., 1992). Even when this strategy has proved hopeless, competitors may fail to score as many points for oneself as they could due to the fact that they only focus on limiting their partners (Van Lange et al., 1992). So, it is possible to conclude that competitors always prefer outcomes that are superior to those in their environment (Van Lange et al., 1992).

4.3 Conclusion

A number of social values have been identified, but usually two opposing orientations apply namely the proself and prosocial orientation. It may be concluded from the theory, that prosocials achieve status mostly through prestige. Their reputation can be extremely valuable because it has been shown to increase the individuals’ status in a group. However, it is possible to conclude that this group is not so vital for this research due to the fact that it does not fit the definition of greed. For the excess of greed lies in its excessive self-concern and self-enlargement. However, it is possible to conclude that proselfs are important for this research. These individuals are mostly focused on maximizing outcome for themselves whereas competitors fit the theory of status best. Competitors are mainly focused on maximizing their own outcome relative to others. Therefore they always prefer outcomes that are superior to those in their environment.

5. Materialism

The message we receive today is that the pursuit and possession of material goods, income and wealth is the route to increase quality of life (Kashdan & Breen, 2007). Even self-identity can be defined by possessions and consumption: “I am what I have and what I consume” (Fromm, 1976).

5.1 Possessions and the self

The term “materialism” has several definitions. Belk (1985) defines materialism as “the importance a consumer attached to worldly possessions” while Bredemeier and Toby (1960) refer to materialism as “the worship of things”. Additionally, materialistic people are characterized by their tendency to define their successes in life by the quantity and quality of their extrinsic possessions (Kashdan & Breen, 2007). However, the assumption that people regard their possessions as part of themselves is not new (Belk, 1988). William James (1890), laid the foundation for the modern conception of the self. His definition is stated as follows:

“A man’s self is the sum total of all that he can call his, not only his body and his psychic powers, but his clothes and his house, his wife and children, his ancestors and friends, his reputation and works, his lands, and yacht and bank-account. All these things give him the same emotions. If they wax and prosper, he feels triumphant; if they dwindle and die away, he feels cast down,-not necessarily in the same degree for each thing, but in much the same way for all” (p. 291-292).

So, the self is not limited to objects but it also includes persons, places and group possessions (Belk, 1988).

5.2 Materialism and psychological needs

Guides have similarly insisted that focusing on attaining material possessions detracts from what is meaningful in life (Kasser, 2002). However, Kasser (2002) concluded that such advice is largely drowned out by today’s messages, proclaiming that material pursuits and accumulation of things provides satisfaction (Kasser,2002). He concluded that these days, newspapers headlines exalt the lottery winner and get-rich-quick books climb to the top of the best seller list (Kasser, 2002). But will the pursuit of money and possessions bring the “good life”? Well, for materialists it can. For instance, research found that materialists tend to value financial success significantly more than other life goals such as community (Kasser & Ryan, 1993). It is also proven that there is a strong relationship between materialism and desired income (Richins & Rudmin, 1994).

The income that is necessary to satisfy the needs of a materialistic person is about 50 percent higher than for those low in materialism (Richins & Rudmin, 1994).

5.3 Materialism and its motives

Fromm (1976) stated that materialistic persons vow possessions as the essence of their lives. However it is not just about purchasing products. Richins and Dawson (1992) found a deeper motivational motive to induce materialism. According to them, materialistic people measure their own success by the number of possessions (Richins & Dawson, 1992). For instance, Kashdan and Breen (2007) concluded that materialistic values were positively correlated with the meaning of life, relatedness to others, feelings of competence and gratitude. This corresponds with the results of Kasser (2002). He concluded that positive self-regard and self-acceptance is related to possessions, money, power and image to the world (Kasser, 2002). However, there is also a link between materialism and personal insecurity (Chang & Arkin, 2002). For instance, it is shown that self-doubt is a significant predictor of materialistic orientations (Chang & Arkin, 2002).

5.4 Materialism and status

We learned that materialistic people are characterized by their tendency to define their successes in life by the qu