Greed: What Is It Good for? Hoyer, Karlijn; Zeelenberg, Marcel; Breugelmans, Seger M.
Personality & social psychology bulletin,
04/2024, Volume:
50, Issue:
4
Journal Article
Peer reviewed
Open access
What is greed good for? Greed is ubiquitous, suggesting that it must have some benefits, but it is also often condemned. In a representative sample of the Dutch population (N = 2,367, 51.3% female, ...Mage = 54.06, SD = 17.90), we examined two questions. First, inspired by Eriksson et al., we studied whether greedy people generate more personal and household income (economic outcomes), have more sexual partners, longer relationships, and more offspring (evolutionary outcomes), and are more satisfied in life (psychological outcomes). We found that greedy individuals had higher economic outcomes, mixed evolutionary outcomes, and lower psychological outcomes. Second, we compared greed and self-interest. We found that they differed in terms of economic outcomes, and partly in terms of evolutionary outcomes, but that they were similar in terms of psychological outcomes. This research provides insights into what greed is and does. Directions for further research are discussed.
A recent, large-scale study among Chinese adolescents found that childhood socioeconomic status (CSES) was positively related to dispositional greed (i.e., the “luxury hypothesis”), instead of ...negatively related (i.e., the “scarcity hypothesis”; Liu et al., 2019c). This relationship was found for only-children, not for children with siblings. The generalizability of these findings may be limited, due to China’s one-child policy and socioeconomic policies which may have led to fewer differences in wealth. We replicated this research in two other cultural contexts that represent markedly different socioeconomic policies in order to test its generalizability: the Netherlands (Study 1,
N
= 2367, 51.3% female,
M
age
= 54.06,
SD
= 17.90), and the USA (Study 2,
N
= 999, 50.1% female,
M
age
= 33.44,
SD
= 12.28). Hierarchical multiple regressions were conducted to test the association between CSES and greed. We mostly replicated the findings by Liu et al. (2019c): CSES was positively related to greed in both studies (“luxury hypothesis”) and there was a moderating effect of siblings in Study 1, but not in Study 2. Implications for theories on greed as well as future research on the association between CSES and greed are discussed.
This study investigates the relationship between the motive of greed and various asset market indicators, such as trading activity and bubble formation (i.e., mispricing, overpricing, and price ...amplitude). We ran experimental asset markets that allowed us to measure individuals’ greed in order to create markets populated with greedy individuals and markets with non-greedy individuals. Regarding trading activity, we found that greedier individuals had higher trading activity on the individual level but not on the market level. On the market level, high-greed markets exhibited less frequent and smaller price bubbles than markets with less greedy traders. If our findings translate to actual markets, greed itself might not contribute to asset market bubbles.
Greed has been shown to be an important economic motive. Both the popular press as well as scientific articles have mentioned questionable practices by greedy bankers and investors as one of the root ...causes of the 2008 global financial crisis. In spite of these suggestions, there is as of yet no substantive empirical evidence for a contribution of greed to individual trading behavior. This article presents the result of 15 experimental asset markets in which we test the influence of greed on trading behavior. We do not find empirical support for the idea that greedier investors trade fundamentally differently from their less greedy counterparts in markets. These findings shed light on the role of greed in trading and the emergence of asset market bubbles in specific, and of the financial crisis in general. Directions for future research are discussed.
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