Do people believe that you can have too much money? The relationship between hypothetical lottery wins and expected happiness

Do people believe that you can have too much money? The relationship between hypothetical lottery wins and expected happiness. Tessa Haesevoets  Kim Dierckx  Alain Van Hiel. Judgment and Decision Making, Vol. ‍17, No. ‍6, November 2022, pp. 1229-1254. https://journal.sjdm.org/22/220824/jdm220824.html

Abstract: Do people think that there is such a thing as too much money? The present research investigated this question in the context of hypothetical lottery wins. By employing a mental simulation approach, we were able to examine how people respond to increasing envisioned jackpot amounts, and whether there are individual differences in people’s reactions. Across five empirical studies (total N = 1,504), we consistently found that, overall, the relationship between imagined lottery wins and expected happiness is characterized by an inverted U-shaped curve, with expected happiness being highest around an envisioned win of roughly 10 million pounds. Both lower and higher envisioned wins reduced participants’ overall expected happiness. In addition to this overall pattern, we identified three clusters of participants who react differently to expected increases in wealth. These clusters mainly differed in terms of how soon the top of the expected happiness curve was reached, and if and when the curve started to drop. Finally, we also found some interesting cluster differences in terms of participants’ prosocial and proself motivations.

Keywords: hypothetical lottery wins; expected happiness; inverted U-curve; cluster analysis; individual differences

7 General Discussion

We started our paper with a quote attributed to Wallis Simpson, “You can never be too rich or too thin.” Most people will recognize that you can be too thin, and, as our results illustrate, many people also seem to believe that you can be too rich. Across five studies, we consistently found that, overall, the relationship between hypothetical lottery wins and expected happiness is characterized by an inverted U-shaped pattern, with the overall desired optimal lottery win being a jackpot amount of approximately 10 million pounds. Considering that in our studies participants were explicitly told that there was no upper boundary to the amount of money that they could possibly win, it can be concluded that this ‘overall’ optimum is situated at the rather low end of the continuum (and considerably lower than the global jackpot average which is situated around 29 million pounds; see Rodger, 2017). After this particular point, the overall expected happiness curve started to drop, which illustrates that, on average, the prospect of receiving too much money negatively impacts people’s overall expected happiness.

Importantly, however, is that our cluster analyses revealed that this general pattern is actually the mere mean tendency of distinct subgroups of people reacting differently to expected increases in wealth, rather than a uniform psychological reaction that is shared by all people. More specifically, our pairwise comparison data revealed the existence of a first cluster of participants (i.e., Cluster 1) who react according to the ‘more-is-better’ (non-satiation) logic. For these people, the expected happiness curve continued to rise when the amount of money that they supposedly won increased, and this even up until the highest included monetary amount of 10 billion euro (in Study 4) and 1 trillion pounds (in Study 5). So, for this type of people there does not seem to be a point of satiation (although the results of Study 5 indicate that they do not necessarily want to have “all the money in the world”). Conversely, the responses of the other two identified clusters (i.e., Clusters 2 and 3) were more in accordance with the ‘too-much-of-a-good-thing’ logic, as these participants expected to be more satisfied with the intermediate wins than with the smallest and the largest envisaged wins. So, for these types of people there is a point beyond which they anticipate that more money will negatively affect their happiness; this point was reached much sooner in the third cluster than in the second cluster. And, at very high lottery amounts the curve of the third cluster even plummeted towards the bottom of the expected happiness scale. This latter finding suggests that this particular subgroup of people does not seem to value money when it comes in great amounts, and even anticipates that this will make them quite unhappy.

Ample prior studies have demonstrated that people fundamentally differ with respect to their prosocial and proself tendencies (e.g., Au & Kwong, 2004; Bogaert el al., 2008; Van Lange, 2000). To contribute to this body of research, as a third objective, we examined if and how the clusters that could empirically be distinguished differed from each other in terms of participants’ proself and prosocial motivations. Across our studies, and in line with our expectations, we consistently found that the cluster of participants for whom there is no satiation effect (i.e., Cluster 1, which reacted according to the ‘more-is-better’ logic) is generally more proself and less prosocially oriented than the other two clusters which included participants for whom there is a point after which expected happiness decreased (i.e., Clusters 2 and 3, which reacted according to the ‘too-much-of-a-good-thing’ logic). Interestingly, our discriminant analysis clarified that the three clusters also differ in terms of more specific proself and prosocial motives. In particular, we found that participants in Cluster 1 were more greedy and also felt more entitled than those in Clusters 2 and 3, with these differences being most pronounced between Cluster 1 and Cluster 3. Furthermore, participants in Cluster 1 are not only driven more by these two specific proself motivations, they are also less concerned about fairness considerations and the welfare of others (which constitute two specific prosocial motivations).

7.1 Strengths, Limitations, and Future Research

An important strength of our work is that we collected data using a variety of research methods, including both a between-subjects design (Study 2), within-subjects designs (Studies 3 and 5), and pairwise comparisons (Studies 4 and 5). The fact that we could replicate our key findings using this divergence in methods and designs strengthens our confidence in the robustness and generalizability of the reported findings. Yet, our approach to employ hypothetical lottery scenarios also contains two important constraints. First, because the lottery wins in our studies were imagined, participants did not really experience the surprise of receiving the message or actually using the money. Instead, they formed a mental model of what they believed would happen. Secondly, lottery wins are a windfall gain whereas other sources of wealth often have a strong link to meritocracy (or at least the illusion of it). In this vein, Donnelly et al. (2018) have shown that earned wealth is associated with greater happiness than inherited wealth.

Although we found some interesting motivational differences between the three emerging clusters, we did not consider all relevant motivational traits and personality factors in our research. A first important motivation that we did not consider in any of our studies is inequality aversion. Given that lotteries by their nature increase inequality, this concept might be particularly relevant to consider in future studies. Another important personality factor that was not included in the present research is the Honesty-Humility dimension of the HEXACO model (Hilbig & Zettler, 2009), which specifically contains a facet called greed avoidance. Low scorers on this trait want to enjoy and display wealth and privilege, whereas high scorers are not especially motivated by monetary or social-status considerations. In light of our research, it can be expected that those whose reactions are in accordance with the ‘too-much-of-a-good thing’ logic (i.e., Clusters 2 and 3) will score higher on inequality aversion and greed avoidance than those whose reactions endorse the ‘more-is-better’ logic (i.e., Cluster 1), but future research is needed to verify these claims.