Avoiding greedy behavior in situations of uncertainty: The role of magical thinking

Ayala Arad*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

Previous studies have found evidence for the belief that actions which tempt fate increase the likelihood of negative outcomes. These included actions that presuppose a good outcome, that reflect hubris or that involve excessive risk taking. This paper explores a related form of magical thinking whereby individuals believe that asking for too much in situations of uncertainty may be punished by the universe and may decrease the probability of the desired outcome. It was found that many participants irrationally forgo the "greedy" option under uncertainty, even though it dominates other options and their behavior is not observed. It is suggested that some participants fear being magically punished for greediness and it is shown that the avoidance of greedy actions under uncertainty is related to the belief that one should not tempt fate. This phenomenon may have implications for various types of economic decisions such as charity donation, insurance purchase and bargaining.

Original languageEnglish
Pages (from-to)17-23
Number of pages7
JournalJournal of Behavioral and Experimental Economics
Volume53
DOIs
StatePublished - 1 Dec 2014

Keywords

  • Belief in a just world
  • Greed
  • Magical thinking
  • Tempting fate

Fingerprint

Dive into the research topics of 'Avoiding greedy behavior in situations of uncertainty: The role of magical thinking'. Together they form a unique fingerprint.

Cite this