Money seems to have some weird effects on the human brain. There’s a condition called “acquisition disorder” whose symptoms include the inability to control spending, compulsive buying, and hoarding. On average, lotteries increase the probability of bankruptcy by five times. money affect human behavior in many different ways.
Table of Contents
Not everyone understands money affect human behavior
Our brain is hardwired to love money. Our ancestors who were good at taking care of their resources, especially money were more likely to survive and reproduce, so our brains are designed to be wired to want more of it. Money is a powerful motivator: There are many studies that show that people will go to great lengths for it.
In fact, the love of money can have a deep effect on how we think and act. People who grow up in a poor family tend to do worse in school, have higher rates of crime and mental illness, and have trouble interacting with other people as adults. But when you give them even just a little bit of money, they suddenly change: Their behaviour improves, they’re more successful in life, and they’re happier.
If you don’t believe me, there’s an experiment called the “Lottery Winners Project” where scientists found out what happens when you give $50,000 to somebody who has never had any real money before. They gave it to 21 people (chosen because they seemed like good candidates) and followed up with them after six months and after twenty years. The results showed that the previously-poor winners did better than a control group that hadn’t won anything at all. So, whatever the condition is money affect human behavior always.
Money can influence the way people do their jobs
Most of us are aware that money can influence the way people do their jobs, perhaps more than any other factor. That’s why it’s no surprise that the presence of a cash incentive has been shown to enhance the performance of tasks, from selling door-to-door to writing essays for college students.
But new research shows that paying people for a job may not just motivate them to perform better it may actually change their very perceptions of the task at hand. In an experiment, subjects were asked to edit a cover letter for a fake job applicant. Some were told they would be paid $2 if they made the applicant look good, while others were told they’d get $2 only if they made the candidate look bad.
Also Read: What Skills do I have | Hard or Soft Skills let’s find out
After completing their edits, participants were asked how much effort they had put into the task, and most reported feeling like their work had taken more time when they knew they’d be rewarded for a good outcome rather than a bad one. Even more interesting: The subjects who felt like they’d put in more time reported feeling more satisfied with the end result even though there was no difference between them.
Money does not automatically make people happy
It’s a myth that money affect human behavior and people’s happiness. The truth is that happiness is the result of a combination of genetic traits and life circumstances, with money only playing a minimal role. People make themselves happy by being kind to others; by meeting their basic needs for food, shelter and safety; and by having fulfilling relationships with family, friends and the community. People who do these things are likely to be happy regardless of whether they are rich or poor.
One of the most interesting human brain studies performed was by researchers at Princeton University. The researchers tried to answer the question of whether money does, in fact, make people happy. They studied a group of individuals who had won millions of dollars in the lottery. They wanted to know if those people were happier than the control group of people who hadn’t won millions.
The results showed that winning the lottery did not increase their happiness at all. In fact, this particular statistic didn’t change from before they won and after they won: 86% of these winners said that winning the lottery had made no difference in their level of happiness.
Also Read: Understanding of Candlestick Charts for Day Trading
Money can have an effect on happiness if it allows people to meet their basic needs more easily, but it doesn’t guarantee happiness in and of itself. For example, although most Americans have more money than they did a century ago, studies show that our average level of happiness has remained the same or even decreased slightly over the same period. It’s not the quantity of money in a person’s bank account that matters; it’s how that person chooses to spend his or her time.
Money shows how much people value you
Money has been shown to be an important factor in determining how much we value other people. Even if we’re not aware of it, being paid for helping someone else out can affect the way we view that person.
Also Read: 5 personal finance thumb rules for better financial planning
In a study conducted in 2012 by Zhu, Zaki, & Keysar, 52 participants were asked to play a game of dice with two other partners (who were actually actors). One of two scenarios took place: some participants were told that they would be paid $1 for their participation, while others were told that they would be paid $20. After the game was over, participants were then asked if they wanted to donate a portion of their monetary compensation to charity.
The results showed that participants who had been told they would receive only $1 donated an average of $2.92 to charity a much larger amount than the average donation from those who were told they would be receiving $20. The study suggests that the reason this happened is that participants who expected to earn only $1 felt more emotionally attached to those around them and wanted to do something nice for them in return for their participation. Participants who expected higher payoffs didn’t feel as connected and therefore didn’t feel as much need to give back.
Money makes people more competitive and less polite
Some studies have found that people with higher levels of income are more likely to display selfish behavior to cut in line, speed, or even cheat than those with less money. However, this is not a universal finding: other studies have found that money doesn’t affect behavior, at least not in measurable ways. The difference might come down to how the study was conducted and what kind of people were included in the study.
Also Read: Psychological effects of money
The results of a study carried out at the University of Amsterdam and published in Psychological Science suggest that money can make some people more competitive and less polite. In the study, researchers asked participants to play a game against two other competitors, where they could earn money.
This game gave them the choice of being “fair” or being “dishonest.” Being “dishonest” could mean getting a larger payout by taking more risk for oneself but also making the payout for everyone smaller if one’s bluff was called by the other players. The “fair” option meant playing it safe by making sure everyone got a small payout but also limiting your own earnings potential. And also this change occurs because money affect human behavior in normal condition.
Also Read: Why Are We So Emotional about Money?