This blog post examines why people choose to ignore social norms and act non-altruistically when their personal interests are secured, using various examples.
In college classes, some students feel dissatisfied with group assignments, and when this dissatisfaction reaches its peak, it often leads to conflict. This occurs because each group member has varying levels of commitment to the project, resulting in some contributing diligently while others contribute relatively less. Among these issues, ‘free-riding’ is particularly problematic. Since group project evaluations are typically given equally to all members, the problem arises where a member who did not substantially participate receives the same grade as their teammates.
The optimal method to prevent free-riding is as follows. Consider a typical group assignment with four students per group. Assuming all students want to avoid an F grade, after the first group assignment is completed, each group ranks its members from highest to lowest contribution. Then, students ranked first in contribution form a new group, and students ranked second, third, and fourth each form new groups in the same manner. In this case, a group composed solely of students ranked fourth in contribution risks all members becoming free riders and receiving an F. Consequently, everyone strives to avoid an F, significantly increasing the likelihood of abandoning free-riding. Furthermore, continuously reorganizing groups this way after each assignment encourages each member to strive for a higher contribution ranking, thereby improving overall participation.
However, if someone in a group of free riders persists in free riding while others complete the assignment, it remains difficult to completely resolve the free rider problem. Therefore, introducing a ‘three-strike-out system’ as a means to enforce accountability could be considered. If a specific student is ranked 4th in contribution three times consecutively, they receive an F grade regardless of the reason. This approach could minimize free-riding.
So, what is the fundamental cause of free-riding? According to social norms, participating group members should bear equal responsibility for the task as the ‘right choice’. Yet the reason for free-riding is simple: it benefits the individual. The aforementioned anti-free-riding measures also merely compel individuals to avoid disadvantage, not to act socially correct. Thus, the basis for human behavioral decisions hinges on personal gain. Naturally, if an action is both beneficial and morally right, people will willingly choose it. Ultimately, the core of the discussion lies in how individuals judge actions that are morally right but offer them no personal benefit. To illustrate this, we will examine examples of non-altruistic actions that yield personal gain, demonstrating that individuals prioritize profit-seeking over morally correct behavior.
First, living rightly can be defined as acting altruistically. So, what happens if living rightly brings personal disadvantage, while acting otherwise causes no tangible disadvantage? Consider the cash payment scenario. At nearby hair salons, stylists often ask customers paying by card, “Do you have cash?” Some department stores also offer discounts at the store owner’s discretion for cash payments. The reason sellers or service providers prefer cash payments is that cash transactions leave no record and thus avoid taxation. Consequently, the seller benefits by evading taxes, and the customer benefits by receiving services at a discounted price. However, such transactions constitute non-ethical behavior aimed at tax evasion and are legally undesirable. The reduced tax revenue must be compensated for through other taxes, effectively shifting the tax burden onto others. Yet, from the consumer’s perspective, cash payments offer economic benefits and carry a low risk of detection. Even if caught, it is usually only the seller who requested cash who faces punishment. In practice, if cash payment is possible, many people take advantage of this to gain effortless profit. This case shows that people may act non-utilitarian when there are no disadvantages.
Next, even if non-utilitarian behavior has side effects, how would people act if they could tolerate those side effects and the gains were substantial? Consider the case of Company A. Several years ago, Company A sought to advertise its products but lacked the funds for mass media advertising. Instead, it chose a strategy of posting flyers across a wide area. Flyers were affixed everywhere, including prohibited locations, and people who consistently saw them became interested in the product. Consequently, Company A was fined for illegally installing outdoor advertisements. However, the promotional effect was substantial, comparable to TV advertising, far outweighing the small fine. This strategy was a non-vitae choice. Individuals were exposed to unnecessary advertising, and it created an unfair situation in the advertising market. Yet, Company A reaped significant benefits. It later became known as a company that pioneered new approaches, introduced as a unique marketing case study. Thus, even if a non-vital choice inevitably entails losses, individuals will make that choice if it brings greater gains, and society does not discourage it.
Finally, while the price to pay for acting non-vital for gain can be substantial, that price does not always materialize. Consider, for example, embezzling company funds. The gain would be the embezzled amount, but if caught, the individual would face significant consequences like job loss, fines, and the loss of trust and reputation. While these consequences are generally greater than the gain, they only apply ‘if caught’. Therefore, the probability of being caught becomes a crucial consideration in this scenario. If the probability of being caught is low, the individual might judge that “(gain obtained) > (individual’s perceived probability of getting caught) × (cost if caught)” and thus engage in non-altruistic behavior. Of course, the probability of getting caught cannot be precisely measured and varies depending on an individual’s risk-taking propensity. However, the fact that people are caught for embezzlement in society clearly shows that there are individuals who take risks and engage in non-altruistic behavior for the sake of gain.
The three examples above illustrate that if the potential gain outweighs the potential cost, individuals are highly likely to choose non-altruistic behavior. Particularly in the first and second examples, one can infer that the social atmosphere tends to encourage or even tolerate such behavior rather than deter it. However, the intangible benefits—such as increased overall trust and happiness when all members of society act correctly—have not been sufficiently considered. Including this aspect could improve interpretations of human behavior centered on profit-seeking, making them more realistic and appropriate. Furthermore, given that the concept of the ‘rational human’ assumed in economics has been shown to be incomplete, incorporating elements like conscience or belief into a more comprehensive discussion could lead to more reasonable and relatable conclusions.
