Why might we be happy to do things for free but not when we are paid to do them? If your neighbor asks you to watch their dog for a night, you will be happy to do it. But if they pay you after, you may not only be offended by the amount, you might expect to be paid even more next time. Humans are social animals and we are happy to help out others. But when we are paid for our work and market norms enter into the scene, social norms run out the door.
This is also the case for me. Recently, I started working in two research labs. One lab pays me per hour, and the other lab is completely volunteer. Intuitively, you might think that I’d like the lab that pays me per hour — why not get some money while doing the work? However, the volunteer lab offers something that the paid lab doesn’t: social exuberance. I go out of my way to do extra work and the adviser, in return, gives me personal mentoring. This type of relationship doesn’t exist in my paid lab. I’m expected to do a certain amount of work and leave.
It is clear that we live in two kinds of worlds: social and market. In the social world, we surround ourselves in a community and thrive off of social relationships. In the market world, “the exchanges are sharp-edged,” writes in his book, “Predictably Irrational” — you only get what you pay for. In the money-minded society that we live in, it is important to keep market norms away from social norms and recognize that following social norms can bring us invaluable profit that money simply cannot.
As it turns out, mixing market and social norms is like drinking orange juice after brushing your teeth — it’s not good. Consider this example from “Predictably Irrational”: A guy takes a girl out on multiple dates. By the third time, his wallet is thinning out and he is hoping to get some physical affection. So on the fourth date, he decides to tell her how much this romance is costing him. Her response? She calls him a beast and dumps him on the spot. (No “Beauty and the Beast” happy ending here.)
The trouble was that he failed to reconcile between market and social norms. By crossing the line, he offended her by implying that her romance is something he can buy. Here is a lesson: Do not mention the cost of the date if you want to impress someone. In fact, according to research by Kathleen Vohs, Nicole Mead and Miranda Goode, even thinking about money makes us behave differently. Therefore, it is likely that money-minded intentions will be taken in a wrong way.
Life is good when market and social norms stay separate. However, when they do collide, market norms always win and the trouble is often permanent. Here’s another example from “Predictably Irrational”: When an Israeli daycare began to fine parents for tardy pick-ups, it not only made parents later, but they also no longer felt guilty about it — parents felt as though their tardiness could be justified with compensation. More importantly, even long after the school removed the fining policy, parents continued to pick up their kids late. This is the permanent effect of market- and social-norm collision. Money, though useful and necessary, turns out to be an ineffective motivator in a social context. We sometimes forget that money is not the answer to social problems, and it never will be.
I was made aware of the dangers of mixing market and social norms a lot more in college. With the popular app Venmo, people instantly request and pay money with friends. For example, if you go out for an ice cream and your friend doesn’t have money on them, you purchase the total amount with your card, while at the same time requesting money from your friend on Venmo. Oftentimes, I see that people fuss about their friends not paying them back a few bucks. I’ve also seen cases where people won’t hang out with their friends until their Venmo requests have been resolved. I think that this obsession with “request and pay” is detrimental to building long-lasting friendships.
So how do we keep market norms out of the equation in social relationships? This brings us to the notion of “give and take” and the power of gifting, suggested by Dan Ariely. Here’s a similar scenario from “Predictably Irrational”: Imagine that you invite me over for dinner and I decide to bring you wine that cost me $30. There are a few problems with this decision. Maybe you don’t like wine and would have wanted beer. Or, maybe you would want to use that $30 on something else. Maybe gifting is a waste of money because you’re spending $30 on something else would give just as much, if not more, happiness as receiving my wine.
But gifting is not a rational activity. If I came over and said, “I was going to spend $30 on wine but I thought you might want to spend it on something else,” and hand you 30 bucks, you would probably think that I’m arrogant. Also, from my point of view, I would not feel comfortable requesting a favor in return when we encounter each other next time. Though gifts may be financially inefficient, “they are an important social lubricant,” writes Dan Ariely. “Sometimes, it turns out, a waste of money can be worth a lot.”
So in the case with Venmo and the ice-cream shop with your wallet-less friend, why not you buy the ice cream this time, and have your friend get your meal next time? If you think that your friend is someone who has no sense of the social norms of give and take, then gift them the book “Predictably Irrational” and maybe they’ll come back around. Remember, there’s nothing warmer than social reciprocity.
Gina Choe can be reached at email@example.com.