Social status beats money

If a lie could harm their image, people are more likely to forgo financial benefits.
People are more honest when talking about topics involving high-status knowledge. A new study in behavioral economics shows that this is true even if they have a financial incentive to lie. As expertise about increasingly complex technologies becomes more difficult to verify, questions of trust are getting more and more important in business.

Trust is essential to every business relationship. Customers want honest information from the the vendor of a complex high-tech product. But can they rely on what they are told? After all, the salesperson looking to earn a commission could be downplaying the disadvantages of the product.
In which situations can we trust other people even though they might have financial incentives to lie? To answer this question, Prof. Michael Kurschilgen (Technical University of Munich and Max Planck Institute for Research on Collective Goods) and Dr. Isabel Marcin (University of Heidelberg) put approximately 190 experimental participants to the test.

Michael Kurschilgen, Isabel Marcin. Communication is more than information sharing: The role of status-relevant knowledge. Games and Economic Behavior, Volume 113 (2019). DOI: 10.1016/j.geb.2018.11.007

The post Social status beats money appeared first on Technical University of Munich – School of Management.

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