The link between wealth, sharing, and population density

By Alvin Lee

SMU Office of Research & Tech Transfer – Rich people are sometimes viewed as selfish, prioritising their own needs over those of others despite the capacity to share. Idioms such as ‘The more you have, the more you want’ are well known, and there is even a book that distills conversations with over 1,000 of the planet’s richest people to a simple message: it’s good to be selfish.

Lynn Tan, a PhD candidate in Psychology at the SMU School of Social Sciences (SOSS), is currently working on research that suggests rich people are more likely to share but only when population density is high.

“The denser the population, the more likely people are to cooperate,” she wrote in the working paper Cash, Crowds and Cooperation: Wealth Increases Cooperation Only When Population Density is High.

“I assessed the concept of ‘cooperation’ in terms of a task where the participants in the experiment are given a hypothetical $10 to distribute among themselves and a randomly assigned partner whom they do not personally know. They have to choose, on a scale of $0 to $10, how much they want to give their partner versus keeping for themselves.”

This is known as the Dictator game, which is commonly used in psychology and behavioural economics to assess cooperation tendencies. This task captures cooperation by measuring how much people prioritise their own needs or goals (i.e., selfishly getting more money), or those of others.

The experiment

Two sets of participants were shown twelve photoshopped pictures of places in Singapore, with one set of pictures made to look empty and the other brimming with crowds to “manipulate their sense of crowdedness”.

Participants were also asked to rate their subjective wealth on a scale of one (low socio-economic status) to ten (high socio-economic status), and the results from the Dictator game were compared across crowded/empty and along the subjective wealth ladder.

Essentially, Tan examined the difference in participants’ giving in the two groups who rated themselves with the same number on the wealth ladder. Among those who rate themselves high on wealth, those who were shown images of crowds in Singapore gave a dollar more on average vis-à-vis those who were shown empty spaces.

What is the explanation for this behaviour?

“We believe that people psychologically react to ecological cues such that they will only behave cooperatively when it benefits them adaptively,” she writes. “One such circumstance is under high population density, where social capital and reputation are crucial for long-term survival.”

“When people perceive population density as high, those who feel wealthier will be more cooperative because they have the resources to do so. When population density is high, reputational information spreads very fast through social networks,” Tan explains. “Thus, if you have the means to do so, you should be more cooperative to build a positive reputation in the tight knit social network.”

She elaborates: “Higher population density leads to more interconnectivity in communication, so people need to be more careful about their reputation. It seems that when our human psychology detects high density, it automatically motivates behaviours that puts us in a good light, especially when we have money to afford it, such as having surplus funds to help others.

“In contrast, in a low population density setting where reputational information doesn't spread as fast, people who have more money are not motivated to be more cooperative because they don't need to ‘maintain their reputation’ since the community is not as interconnected.”

Tan also compared results of her experiments with those done in America where the national population density is one-eighth of Singapore’s. She found that the wealthier Americans were, the less likely they were to cooperate, although she acknowledges that the results would likely be different in densely populated urban centres such as New York City.

The COVID inspiration

Tan conducted the experiments during the height of COVID-19 and was unable to hand participants real money for the Dictator game, which she believes could have amplified the results. “There have been studies showing that when people handle physical money, the general impact is bigger. If a person really is selfish, he or she would keep all the money because it’s in their hands. If you’re a giving person, you might split it 50/50 or keep even less.”

She adds: “This research was inspired by Covid stories globally. It seemed like some poor people were going out of their way to help others, while some wealthy people were being more selfish and holding parties during COVID lockdowns.

“Some psychology research found that richer people are more unethical because they feel more powerful and ‘above the law’. Yet, this is not always the case because we also know of wealthy people who are generous and kind. Thus, there seem to be some confusion in whether wealth makes people prioritise themselves or others.

“Hence, I wanted to investigate if population density can explain these differences such that in high population density, wealthier people are more cooperative, while in low population density, poorer people are more cooperative. This was exactly what I found.”

Back to Research@SMU August 2022 Issue