Competition Affects Your Perception of Your Paycheck

How you feel when you see your paycheck may have a lot to do with how much your colleagues earn, according to a study by researchers at the University of Bonn in Germany.

They used magnetic resonance tomography to monitor brain activity in male volunteers divided into pairs. Each pair, in adjoining brain scanners, were asked to estimate the number of dots that appeared on a computer screen and were then told if they had the correct answer.

If they were right, they received a reward ranging from 30 to 120 euros. Each participant also learned how his partner performed and how much he had been paid.

When a participant received more money than their co-player, they showed much stronger activation in the brain’s reward center than when both players received the same amount of money.

“This result clearly contradicts traditional economic theory. The theory assumes that the only important factor is the absolute size of the reward. The comparison with other people’s rewards shouldn’t really play any role in economic motivation,” Bonn-based economist Armin Falk said in a prepared statement.

The researchers plan to conduct further tests on women and Asian volunteers to determine whether gender or culture influences this kind of money-based competition.

(SOURCE: University of Bonn, news release, Nov. 19, 2007) Net News Publisher