I was sat in the pub with a group of people and someone posed the following scenario:
- You’re a billionaire
- You and four friends go to a restaurant
- It becomes clear that the restaurant is going to kidnap your group
- You all run for the door
- Your 4 friends get outside but you slip and fall over and are stuck inside
- All your friends try to help you:
- One opens and holds the heavy metal door
- One rings the police to get help
- One throws bricks to slow your attackers
- One runs inside to help you out
You choose to give £100 million to your friends; the question is, how do you divide it?
It’s an interesting question, everyone did something. Without everyone helping, you don’t know if you would have escaped and got away. Clearly, the way your friends helped posed different levels of personal risk to themselves though; the one who rang the police was the safest whilst the one who ran in was most at risk.
The group of people who were asked this question were divided; with people generally choosing to:
- Divide the reward evenly as everyone did something
- Give more to the one who ran inside and less to the one who rang the police
- Argue that if you were rich you’d probably already have given your friends money, making this inconsequential
My two main thoughts were:
What About £1 million?
£100 million is a lot; even 5% is still enough to pretty much not need to worry about money ever again – after a certain point, I would say that the split almost becomes unimportant – as long as it’s not too extreme.
What if though, we change the narrative to £1 million? Getting half would be a lot and may change the way you can live but it’s not so much that money would no longer matter. In contrast though, £100k allows you to do a lot less and live a lot less freely than £500k would.
Making your decision on how to divide the money becomes more important at this level in my opinion as it’s a lot, but how you divide it makes a big difference.
Whatever, It’s Free Money Though…Right?
So, this is the interesting bit; I’m sure I’ve heard of a similar experiment to this, although, I did a quick Google and couldn’t find it. It’s not verbatim but the below should provide an overview of what it looked at and outcome:
- There are two people in three different scenarios
- In each scenario, both parities know the outcome for themselves and the other party
- The three scenarios were:
- You give no money to either person
- You give £5 to both people
- You give £5 to one and £10 to the other
- You give no money to either person
- The respective outcomes were:
- They hadn’t lost anything, they weren’t expecting anything so the outcome was neutral
- Both parties were happy as they each got free money
- Even though they each got given free money, the one who got less was annoyed that they were “mistreated” and not been given an equal share.
In essence; where there was no money, it led to more negative sentiment than where each party was given something. Suggesting that whilst rewarding the level of risk may reflect the actions taken…you may lose friends.
I chose to give my friends an equal split.
If you give each friend the same money; you’d like to hope they would be grateful and that in the future they would help again.
Maybe the one who took the most risk last time, wouldn’t if it happened again as he wasn’t rewarded for it. Maybe though, the one who took the least risk last time takes more risk next time as they feel they owe you due to your generosity. Either way, as they didn’t take the risk for money you’d like to think they would still be grateful and nothing would change.
If it was four strangers – that may well lead to a different outcome!
Interestingly, this is the same logic that applies to salaries.
As soon as you find out someone else’s salary, it creates a hierarchy and provokes more competitiveness. As a result people judge others and people who feel relatively underpaid start to act more apathetic and feel undervalued. This is true for peers but can also be true across verticals and across levels of seniority.
It’s good to know what others get paid as this transparency helps to maintain fairness. Be careful what you wish for though as it can lead to negative externalises and impacts as opinions differ.