The Psychological Consequences of Money

The role of prices in conserving critical natural capital

Until recent decades, economic decision makers have largely ignored the nonmarket benefits provided by nature, resulting in unprecedented threats to ecological life-support functions. The economic challenge today is to decide how much ecosystem structure can be converted to economic production and how much must be conserved to provide essential ecosystem services. Many economists and a growing number of life scientists hope to address this challenge by estimating the marginal value of environmental benefits and then using this information to make economic decisions. I assessed this approach first by examining the role and effectiveness of the price mechanism in a well-functioning market economy, second by identifying the issues that prevent markets from pricing many ecological benefits, and third by focusing on problems inherent to valuing services generated by complex and poorly understood ecosystems subject to irreversible change. I then focus on critical natural capital (CNC), which generates benefits that are essential to human welfare and have few if any substitutes. When imminent ecological thresholds threaten CNC, conservation is essential and marginal valuation becomes inappropriate. Once conservation needs have been met, remaining ecosystem structure is potentially available for economic production. Demand for this available supply will determine prices. In other words, conservation needs should be price determining, not price determined. Conservation science must help identify CNC and the quantity and quality of ecosystem structure required to ensure its sustained provision.

Merely Activating the Concept of Money Changes Personal and Interpersonal Behavior

Money plays a significant role in people's lives, and yet little experimental attention has been given to the psychological underpinnings of money. We systematically varied whether and to what extent the concept of money was activated in participants' minds using methods that minimized participants' conscious awareness of the money cues. On the one hand, participants reminded of money were less helpful than were participants not reminded of money, and they also preferred solitary activities and less physical intimacy. On the other hand, reminders of money prompted participants to work harder on challenging tasks and led to desires to take on more work as compared to participants not reminded of money. In short, even subtle reminders of money elicit big changes in human behavior.

Does Autonomic Arousal Distinguish Good and Bad Decisions?

The somatic marker hypothesis (SMH) proposes that physiological feedback to the brain influences cognitive appraisal and human decisions, however, the strength of evidence in support of the SMH is equivocal. We examined the validity of the SMH by measuring physiological arousal in a population of healthy individuals playing the Iowa Gambling Task (IGT), which is a computerized card game designed to assess real-life decisions. We also examined the influence of reinforcer type on IGT performance and physiological reactivity. Skin conductance level (SCL) reactivity was measured in 41 participants performing the IGT using either facsimile or real money. Participants were categorized as normal (i.e., nonimpaired) or impaired on the basis of their IGT performance, and differences in performance and physiological reactivity between groups were examined. No differences in SCL were found between normal and impaired groups. However, greater SCL rises were borderline significant when anticipating choices from bad decks compared with good decks, and a significantly greater SCL rise followed a reward from a bad deck. The effect of reinforcer type also revealed marginally greater performance when using facsimile money. This was corroborated physiologically by Deck × Reinforcer Type interactions, showing a marginally significant tendency for a greater SCL rise when anticipating a choice from a bad deck using facsimile but not real money, and a significantly greater SCL rise following a reward from a bad deck when using facsimile but not real money. Findings constrain the SMH, suggesting that autonomic activity may discriminate between good and bad decks (i.e., good vs. bad decision-making) by reflecting the magnitude of gains and losses, but is independent of long-term consequences and does not discriminate between overall good and bad performance (i.e., normal vs. impaired decision-makers).

The evolutionary origins of human patience: temporal preferences in chimpanzees, bonobos, and human adults

To make adaptive choices, individuals must sometimes exhibit patience, forgoing immediate benefits to acquire more valuable future rewards [1-3]. Although humans account for future consequences when making temporal decisions [4], many animal species wait only a few seconds for delayed benefits [5-10]. Current research thus suggests a phylogenetic gap between patient humans and impulsive, present-oriented animals [9, 11], a distinction with implications for our understanding of economic decision making [12] and the origins of human cooperation [13]. On the basis of a series of experimental results, we reject this conclusion. First, bonobos (Pan paniscus) and chimpanzees (Pan troglodytes) exhibit a degree of patience not seen in other animals tested thus far. Second, humans are less willing to wait for food rewards than are chimpanzees. Third, humans are more willing to wait for monetary rewards than for food, and show the highest degree of patience only in response to decisions about money involving low opportunity costs. These findings suggest that core components of the capacity for future-oriented decisions evolved before the human lineage diverged from apes. Moreover, the different levels of patience that humans exhibit might be driven by fundamental differences in the mechanisms representing biological versus abstract rewards.