Cash Rewards Have Less Sway in Collectivistic Cultures

Money talks louder in some languages than others

By Thomas Talhelm edited by Daisy Yuhas

If you’re trying to get someone to do something, what’s the best way to achieve that? Paying them probably comes to mind, and this intuition is a basic tenet of economic theory. In a massive 2018 study, researchers tested 18 ways to motivate people to do a simple task—and found that money worked best.

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Thanks to the researchers of the 2018 study, who shared their data with me, I was able to take a closer look at their findings. I found that the behavior of participants from India looked very different from that of people in the U.S. In one of the scenarios tested, the researchers had some people work to earn money for themselves and other people earn money for charity. In the pay condition, workers received 10 cents for every 1,000 times they pushed the buttons. In the charity condition, those 10 cents went to the Red Cross. According to classical economics, people should work hard for their own pocketbook but slack off when that money is going to charity. And that described American participants quite well. Button pushes in the U.S. dropped 14 percent when money went to charity versus to participants. But in India, it made almost no difference—there was a decrease of less than 1 percent.

Why would money influence people in the U.S. more than in India? One possibility is that more Americans have studied economics, which teaches people to behave more like economists say they should. There is in fact some evidence that people in econ classes behave more “rationally”—that is, selfishly—in games where researchers ask people to make choices about earning real money versus being nice to other people. Another explanation is that the U.S. is an especially capitalistic culture, which, some people argue, makes people hyperfocused on money and competition. The movie Jerry Maguire embodied that image of American culture when its eponymous character, played by Tom Cruise, shouted into the phone, “Show me the money!”

Research suggests that explicit exchange and contracts are probably less important in “low-mobility,” collectivistic cultures. Sure, India, China and Mexico—all more collectivist than countries such as the U.S. and U.K.—have plenty of contracts and wage labor. But people there tend to feel more enmeshed in their relationships than Americans or Brits do. And those relationships—even at work—bind people together in fuzzy ways that aren’t outlined perfectly in contracts. That could explain why, when I looked through data from the study, I found that participants in India worked harder in response to a social norm, to social comparison (“We will show you how well you did relative to other participants”) and even to a simple request to “please try as hard as you can.”

We reasoned that, if our hypothesis was correct and this difference reflected a broader cultural difference, we should be able to find differences in other cultures beyond the U.S. and India. So my research team tested a new task on people in Western, individualistic cultures in the U.S. and U.K., as well as in more collectivistic ones in India, Mexico, China and South Africa. Again, money spoke louder in the West, as we reported in Nature Human Behaviour. For example, money outperformed psychological nudges by more than 100 percent in the U.K. but only by about 20 percent in China.

One thing we worried about was whether the differences came down to trust. Did our participants in the West simply trust the scientists and payment system more than people in other nations? Our data suggested that trust was not the explanation. For example, we asked our participants whether working hard on the task could help build a relationship with us and lead to more earnings in the future. Our participants in more collectivistic countries were more likely to agree. That investment of time and effort only makes sense if they have some trust in us and the platform.

Sure enough, language changed the power of money. The sway of monetary payments over nudges was about twice as large in English as it was in Hindi. So even in the same economy, money spoke louder in English.

Our findings raise many interesting questions about rationality and ethics. First, despite the tendency in classical economics to talk about “rational actors” and how people should behave, what’s rational depends on the social environment. If explicit contracts are more important in one culture, it makes more sense to read the contract carefully and ignore the polite request to “try hard.” But in cultures where relationships matter more, it makes more sense to pay attention to social cues.

On the flip side, our findings probably give ammunition to critics of the U.S.’s obsession with money. But as with biases more broadly, identifying patterns in behavior that are shaped by culture is empowering. It may make us more aware of our own tendencies, for example.

Understanding money’s power also has implications for development aid and the growing “nudge” movement, which tries to find subtle ways to change people’s behavior using psychology. Our study used trivial tasks, such as mashing buttons on a computer. But people often use money or nudges to motivate changes that are good for society, such as donating organs or saving electricity. Understanding culture can make us better at making our world a better place.

A recent study found that a nudge to change social norms about female entrepreneurship in Niger was enough to boost household income as much as giving people money—and it cost far less. Our findings suggest that psychological nudges may be most effective in the places they help people the most.

Scientific American’s Mind Matters editor Daisy Yuhas at [email protected].

Thomas Talhelm is an associate professor of behavioral science at the University of Chicago Booth School of Business. He researches cultural differences and how southern China’s history of rice farming gave it a different culture from China’s wheat-farming north.

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