Economists at The University of Queensland (UQ) and the World Bank in Washington found a pervading and persistent “default belief” among believers and non-believers that expenditure and sacrifice might somehow reap rewards, even when there was no effect on outcomes.
UQ Professor Paul Frijters, who conducted the research alongside World Bank economist Juan Baron, said there was an across-the-board tendency to bargain with the unknown, that was greater in times of uncertainty. Their findings were recently published in the July online edition of the Economic Record.
“There seems to be a default belief that people can bargain with the unknown, and they need a lot of evidence to the contrary before it fades away,” Professor Frijters said.
“Much like some cultures dance for their gods in order to get rain, Western participants will spend money on problems even when that expenditure has no demonstrable effect.
“Even when witnessing hundreds of occasions where it made no difference, they keep sacrificing large portions of their income to the perceived source of the problem. Only if they personally experience dozens of disappointments will they slowly stop sacrificing.”
In the experiment, 500 participants played a game in which the price for the goods they “produced” was determined by a source of uncertainty called Theoi. Although the price was set completely at random for each of 20 rounds, the participants had the option of contributing some of their produced goods to Theoi.
At the start, the average participant donated half of all production towards Theoi, even when there was no relationship between the level of sacrifice and the market price.
“Even after 20 rounds, the average participant still donated a quarter of all production,” Professor Frijters said.
“There were no participants who didn’t donate anything for all 20 rounds, and there were very few who didn’t donate anything the last 10 rounds.”
“The wish to sacrifice was very strong. In an experiment where the level of sacrifice was set initially at 10 per cent, nearly all participants changed the level to much higher,” Professor Frijters said.
“Aggregate sacrifices were over 30 per cent of all takings in the main experiments, and only slightly lower if we didn’t use a human name for the uncertainty in price (like Theoi) or if we allowed participants to see what others experienced. Sacrifices only really dropped when the level of uncertainty was lower.”
The authors thus conclude that “any important source of uncertainty” will witness the development of a religion around it in which people sacrifice towards its perceived source.
As well as these findings, the study also found there was no relationship between the level of sacrificial behaviour and whether participants belonged to a recognised religion; that engineering students donated more than economics students; and that participants who were selfish towards others were also less likely to sacrifice to Theoi.
Professor Frijters said the study was an important stepping stone towards a general theory of human behaviour that will be revealed in a book due later this year called An Economic Theory of Greed, Love, Groups, and Networks. It will be published by Cambridge University Press.
Author: Professor Paul Frijters. School of Economics, UQ Business School, The University of Queensland. Brisbane, Australia (firstname.lastname@example.org). Work phone: +61 (0)7 33463483.
Alternate contact: Juan Baron, PhD. World Bank, Washington, email@example.com
Downloads: The freely available early working paper version of the study can be found at: http://ideas.repec.org/p/iza/izadps/dp4902.html and the complete published paper is available from: http://onlinelibrary.wiley.com/doi/10.1111/j.1475-4932.2012.00802.x/abstract