Your Brain Doesn't Like It When You—or Others—Get Screwed on Wages

If you've ever resented your paycheck—or even felt a pang of guilt for being overpaid—then you understand the concept of equity theory: the notion that people should be rewarded according to the amount of work they put in. A group of Norwegian researchers has now tested that theory in an fMRI machine.

Their experiments, conducted at the Choice Lab in Bergen, Norway, claim to reveal for the first time the brain's reactions to fair and unfair income distributions, explaining why, for instance, people may be willing to sacrifice monetary rewards if it results in a fairer outcome. Getting paid fairly feels good; screwing others hurts.

Erik Ø Sørensen, an economics professor at the NHH Norwegian School of Economics and one of the study's authors, said the results showed how equality for equality's sake—the equal distribution of wealth regardless of the work done—has no positive effect on the brain's reward center.

The study did confirm, however, that people's brains light up with joy when they're rewarded according to what they deserve as the fruits of their labor, what Aristotle called proportional equality. People prefer to get what they—and others—deserve.

"The main research is that most people, they don't find equality to be fair in situations where people have contributed differently," said Sørensen, whose research focuses on issues of fairness. "In real life economic environments, there are no strong reasons to believe people think equality is a matter of fairness in itself."

Previous research seemed to suggest that people preferred simple numerical equality as a matter of course. In a study published in 2009, experimenters gave test subjects unequal money transfers and asked them to evaluate those transfers after having done no work. The research seemed to indicate, said Dr. Sørensen, "that there was a preference for equality per se, that was hard-wired in the brain."

But because none of the participants did any work prior to receiving the money, everyone had essentially the same expectations for payment. "We looked at that paper, and we realized that the research was done in an environment where there really were no reasons why deviations from equality"—that is, anything but completely equal pay—"could be considered fair."

Ask some test subjects to do work while others remain idle, and people's expectations change. Those who work more expect to be compensated more, and those who work less expect to be compensated less. And any deviations from fairness can be costly.

"This result is particularly striking," the researchers write, "because our sample is from a Scandinavian country that is among the most egalitarian countries in the world."

How the experiment worked

The Choice Lab reached their conclusions by looking at a population of 47 male students from the Norwegian School of Economics. (It is, they say, the largest neuroeconomic study in Norwegian history.) Each participating student performed some menial task, like stuffing envelopes or entering data. Experimenters grouped the participants into pairs, and each pair shared an earnings pot of 1,000 Norwegian krone, or $170, which they were told they would split fairly.

In some pairs, both participants worked 60 minutes; in some, one worked 30 and one worked 90. After performing the work, participants subjectively rated different distributions of earnings between themselves and their partner on a scale of -5 to +5. Each subject's brain was being scanned during the ratings process.

The brain scans zeroed in on the striatum, a part of the brain that is a center of "hedonic rewards." When a person feels pleasure, like from a big payday, or food or sex, fresh blood flows into the striatum. This influx of blood shows up on the fMRI, so it's possible to read a subject's physiological response to pleasurable and painful inputs.

As the researchers had predicted, the participants' brains exhibited pleasure responses to the news of fair earnings distributions.

For instance, if I worked 30 minutes and my partner worked 90 minutes, a perfectly fair distribution, in which I received one-quarter of the pot and my partner received three-quarters, would cause pleasure for both of us. But an unfair distribution, for instance, in which I receive three-quarters and my overworked partner gets one quarter, causes some displeasure for both of us. These results point to a hardwired preference for fairness, particularly in regard to proportional earnings rewards. The average person does not like to be the one benefiting from screwing another person over.

The cost of unfairness

In fact, the experimental results indicated that, in the process of transactions, the participants' brains registered fairness as if it had a monetary value.

What exactly does that mean? Consider a scenario where two people both work 60 minutes on the same task. A proportional income distribution of a 1,000 krone pot would mean each person gets 500 krone, or equal pay for equal work. If one individual were to be paid more and one less, both would register the effects of unfairness. But reduce that disproportionality by 10 percent, and the Choice Lab's findings indicate there is a value equivalent to getting paid an extra 34 krone, or about 5 dollars.

"We find that a reduction in the deviation from proportionality by 10 percentage points has the same effect as an increase in own income of 34 NOK," the researchers wrote.

Dr. Sørensen put it another way: "If you worked twice as much as me, if I evaluate a distribution where I get slightly more—say I get 520 and you get 480—then I have to balance two considerations. First I'm very happy of course because I get more money, but I also feel bad because you get less than what you deserve, because you worked more than me, and that sort of detracts from the joy that I had from the money I get."

"On the other hand," he said, "if I worked the most, and I look at deviations from equality in my favor, then I have two positive benefits. I both get more money, and I also get a more just distribution, because I really deserve to earn more than you if I worked for a longer time." A proportional distribution of income, he underscored, "is evaluated much more positively than an equal distribution."

Why, then, do people choose to benefit from taking a disproportionate share of other people's labor every day? Is it because they have deviant brains, which don't feel the sting of unjust distributions of wealth?

Choice Lab found that the effect of a pay increase on one's brain depends on one's place in the labor distribution. If you're on the low end of the labor ladder—meaning you're one of the people doing less work than others—than an increase in your share of income actually is less costly to you than an equal increase is valuable for someone who worked more. That is to say, in the brain of the overpaid person who did less work, the displeasure of perceived unfairness lessens the pleasure of getting more money.

The person who did more work actually adds the pleasure of being on the right side of proportional fairness to the pleasure of getting more money. Giving a $50 bonus to the hard worker produces more subjective value than taking $50 away from the slacker.

Basic equity theory—a concept first posited by workplace psychologist J. Stacy Adams in 1963—tells us that income should be proportional to work, and that people's psyches become disgruntled when this is not the case. What the new study tells us is that yes, equity theory is right, our psyches and brains are wired to get mad about unfairness. The results, say the study's authors, are "the first set of neuronal evidence for equity theory."

This is just a brain imaging study, of course, not a conclusive explanation for how income is distributed in the real world.

However, the research may shed light on the psychology that underwrites the sometimes astronomical levels of executive compensation that some say is a driving force of inequality in America today. Every extra dollar going to the people who perceive themselves as contributing more work is worth more in the brain than every dollar that's going to the people who perceive themselves as contributing less.

But even if brains like ours are inclined to foster fair pay, they can't evaluate what's fair if they can't evaluate something more basic: how valuable their work really is. Unfortunately, that's something that the people who are paying them often get to decide.