Greed has been a frequent topic in the media since the last major financial crisis. Greed not only harms others, it can even be self-destructive. What does psychology know about the unquenchable desire for more?
"The world is a haywain - everyone picks as much as he can." (flemish proverb) - Detail from the Haywain Triptych by Hieronymus Bosch
Unrestrained, insatiable, avaricious - we have many words for people who never get enough. They desire money or material wealth, but also immaterial things like power or sex. They share an insatiable desire for more, often at the expense of others.
Morally, greedy people don't have a good standing. Whereas quirky Scrooge McDuck bathing in his money seems still somewhat likeable, the depiction of the sinners in Dante's inferno leaves no doubt that greed is morally reprehensible: The greedy ones sink into mud and faeces or are torn to shreds by Kerberos, the three-headed hellhound. In Christianity greed is one of the Seven Deadly Sins. Buddhists believe that it is a poison leading to bad karma.
If you leave aside moral issues and take a neutral perspective, human desire is not in itself negative. From an evolutionary view, desire and the accumulation of resources make sense, since they serve self-preservation. The moral philosopher and economist Adam Smith argued that desire motivates people to be productive and to maximize their outcomes. In his opinion, it is a basic prerequisite for a flourishing economy that increases the wealth and well-being of individuals and society. However, it is alarming when desire becomes a self-perpetuating process, when it becomes GREED.
Greed leads to a tunnel vision
The Dutch social psychologist Terri Seuntjens and her colleagues at Tilburg University speak of greed when people no longer act out of healthy self-interest but are so focused on getting more that their behaviour is no longer rational. They suppose that greed may lead to a tunnel vision: “Greed can cause an obsession with an object of desire and can make everything else less important. This component might explain why greedy people sometimes act in ways that are irrational and detrimental for themselves. Focusing too much on one’s own immediate benefits may cause people to forget the consequences for society as a whole or for their own future situation.”
In one experiment the researchers had three-hundred test persons play the so-called Forest Management Game: Participants imagined owning a timber company and bid against three competitors to harvest timber in the national forest. The rules of the game: Large bids are highly profitable. But if the joint bids of all four companies are too high, the forest as a future resource is completely depleted.
It turned out that the greedier gamers were, the more they tended to overharvest the forest and to ruin future resources. In addition, the scientists found that acquisitiveness was the key motivation to make high bids. In contrast, the expectation that others could also try to achieve as much as possible for themselves was less worrying for the greedy.
Greed causes risky behaviour
The results of the Dutch team are in line with the findings of Patrick Mussel and Johannes Hewig who studied the greedy personality at Würzburg University, Germany. The two psychologists developed a test measuring the disposition to greed and found that this disposition predicts risky economic behaviour. In a laboratory experiment, twenty students of economics participated in the Balloon Analogue Risk Task (BART). The task is as follows: The students are presented with a computer depiction of a balloon that can be incrementally inflated by pressing a key. As the balloon inflates, the test person accumulates rewards with each new key-press. If the balloon pops, all rewards for that balloon are lost, but the test persons can choose to stop inflating and bank the reward at any time. More key-presses equate to greater reward, but also greater probability of popping and forfeiting the rewards for that trial.
The Balloon Analogue Risk Task assumes that people with a higher level of risk appetite are more likely to pop the balloon, earning less reward overall than the average person. As expected, it turned out that the students who were particularly greedy inflated the balloon more often than people with lower levels of greed.
Greedy people learn less from their mistakes
Mussel and Hewig were also interested in what happened in the brain of the greedy while they were solving the BART. They tracked the neural processes using an electroencephalogram (EEG). Typically, the EEG shows an Error-related negativity (ERN) indicating whether an event (the balloon's popping) is better or worse than expected. Neuropsychologists assume that this component plays a crucial role in learning from mistakes and changing one's behaviour accordingly.
Surprisingly, the ERN was not observed in greedy people. They showed almost the same brain activity, regardless of whether the balloon had burst or not. From a neurological perspective, it seems possible that greedy people may learn less from their mistakes!
Greed and life satisfaction
Greed leads to impulsivity, recklessness and antisocial behaviour. By destroying common resources, greedy people risk the welfare of society, as well as their own well-being. Typically, they are never satisfied, no matter how much money, goods or power they already have. It is therefore hardly surprising that Seuntjens and colleagues couldn’t find a correlation between greed and income. Rather they found that greed goes hand in hand with low self-esteem and lower life satisfaction. Whether this dissatisfaction is the cause or consequence of greed remains to be seen...
PS: If you are interested in how to spend your money to be happy, you should read the book "Happy Money" by Elizabeth Dunn and Michael Norton. One advice of the two authors: Invest in others.
This text was translated into English using DeepL:
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References
Dunn, E., & Norton, M. (2014). Happy Money. The Science of Happier Spending. New York: Simon & Schuster
Holroyd, C. B.; Coles, M. G. H. (2002). The neural basis of human error processing: Reinforcement learning, dopamine, and the error-related negativity. Psychological Review. 109: 679–709. doi:10.1037/0033-295x.109.4.679
Mussel, P., & Hewig, J. (2016). The life and times of individuals scoring high and low on dispositional greed. Journal of Research in Personality, 6452-60. doi: 10.1016/j.jrp.2016.07.002
Mussel, P., Reiter, A, M. F., Osinsky, R. & Hewig, J. (2014). State- and trait-greed, its impact on risky decision-making and underlying neural mechanisms. Social Neuroscience, 10. doi:10.1080/17470919.2014.965340
Seuntjens, T. G., Zeelenberg, M., Breugelmans, S. M., & Ven, N. (2015). Defining greed. British Journal of Psychology, 106(3), 505-525
Seuntjens, T. G., Zeelenberg, M., van de Ven, N., & Breugelmans, S. M. (2015). Dispositional greed. Journal of Personality and Social Psychology, 108(6), 917-933. doi:10.1037/pspp0000031