Psychological Underpinnings of Zero-Sum Thinking
6 Pages Posted: 15 Feb 2018
Date Written: January 28, 2018
A core proposition in economics is that voluntary exchanges benefit both parties. We show that people often deny the mutually beneficial nature of exchange, instead using zero-sum thinking. Participants read about simple exchanges of goods and services, judging whether each party to the transaction was better off or worse off afterwards. These studies revealed that zero-sum beliefs are pervasive. These beliefs seem to arise in part due to intuitive mercantilist beliefs that money has value over- and-above what it can purchase, since buyers are seen as less likely to benefit than sellers, and barters are often seen as failing to benefit either party (Experiment 1). Zero-sum beliefs are greatly reduced by giving reasons for the exchange (Experiment 2), suggesting that a second mechanism underlying zero-sum thinking is a failure to spontaneously take the perspective of the buyer. Implications for politics and business are discussed.
Keywords: Intuitive theories, Folk psychology, Judgment & decision-making, Behavioral economics
JEL Classification: D6, D8, H00, M3, Z13
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