Status as a Valued Resource

Abstract:     
While the striving for status has long been recognized in animals and in humans, the role of status in their utility calculations has not been clarified. Specifically, the debate has not been settled whether people pursue status as a means to achieve power and resources or as an (emotional) goal in itself. We present results of a rent seeking experiment with human subjects from four different national cultures. Our results show that people regard status as a valued resource in itself, rather than a means to an end. Participants in the experiment played a two-stage game in which they tried to win a risky all-or-none rent. An analysis of the data established that the subjects valued status independently of any monetary consequence and were willing to trade-off some material gain in order to obtain it. This result was stable across the four cultures from Hong Kong, Turkey, the US, and Germany. Moreover, the amount of money that participants were willing to trade off against status corresponded to the Hofstede's power distance index of the respective culture. The power distance index of a culture has been shown to be correlated with the importance and acceptance of status symbols in that culture. Finally, the amount of status seeking observed was different among men and women, an intriguing observation that deserves further work.

Keywords: status, experimental economics, crosscultural studies

JEL Classifications: C9, D7

Working Paper Series