People Reject Free Money and Cheap Deals Because They Infer Phantom Costs
Andrew J. Vonasch,
Reyhane Mofradidoost,
Kurt Gray
Abstract:If money is good, then shouldn’t more money always be better? Perhaps not. Traditional economic theories suggest that money is an ever-increasing incentivizer. If someone will accept a job for US$20/hr, they should be more likely to accept the same job for US$30/hr and especially for US$250/hr. However, 10 preregistered, high-powered studies ( N = 4,205, in the United States and Iran) reveal how increasing incentives can backfire. Overly generous offers lead people to infer “phantom costs” that make them less … Show more
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