"To illustrate the point, consider a simple game I conduct with my students. I have them split up into pairs and ask them to imagine I’m giving $1,000 to one member of each pair.
I tell them the recipients can keep some of the money only on condition they reach a deal with their partner on how it’s to be divided up. They have to offer their partner a portion of the $1,000, and their partner must either accept or decline. If the partner declines, neither of them gets a penny.
You might think many recipients of the imaginary $1,000 would offer their partner one dollar, which the partner would gladly accept. After all, a dollar is better than nothing. Everyone is better off.
But that’s not what happens. Most partners decline any offer under $250 – even though that means neither of them gets anything.
This game, and variations of it, have been played by social scientists thousands of times with different groups and pairings, and with remarkably similar results.
A far bigger version of the game is being played on the national stage as a relative handful of Americans receive ever-larger slices of the total national income while most Americans, working harder than ever, receive smaller ones.
And just as in the simulations, those receiving the smaller slices are starting to say “no deal.”
Some might attribute this response to envy or spite. But when I ask my students why they refused to accept anything less than $250 and thereby risked getting nothing at all, they say it’s worth the price of avoiding unfairness.
Remember, I gave out the $1,000 arbitrarily. The initial recipients didn’t have to work for it or be outstanding in any way.
When a game seems arbitrary, people are often willing to sacrifice gains for themselves in order to prevent others from walking away with far more – a result that strikes them as inherently wrong."
Robert Reich, former Labor Secretary under Bill Clinton and one of my favorite economist.
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