Social Versus Market Norms

Two casual business partners sitting at table together and worki

I get asked for career advice all the time, and I’m happy to give it. It’s part of my job at CareerSource Northeast Florida, of course, but it’s also my personal mission to help as many people as possible find meaningful work and become successful. So I give my time freely, and for free (two different concepts.) I mentor college students and help friends of friends.

Only once has someone done something so egregious that it stopped me in my tracks and almost brought an advice session to a screeching halt. He offered me cash.

The reason this was such a jarring and unpleasant experience is now clear to me. It’s explained in the excellent book Predictably Irrational by Dan Ariely. He’s the James B. Duke Professor of Psychology and Behavioral Economics at Duke University, and he’s spent his career wondering why – and how – we humans make decisions. His research indicates that we seldom make decisions on what to pay, what to buy or how hard to work based on economic factors (despite what we tell ourselves.) In fact, we can be wildly irrational in how we behave, and be consistent in our irrationality.

One chapter of the book is dedicated to the concept of the two worlds we live in: the world of social norms and the world of market norms. The world of social norms is where we conduct our relationships. Our friendships, our love lives, and our civic engagement are governed by rules about how we feel about each other and how we should act based on our values and other guiding principles.

Social norms tell us we help out our brother because he’s family. We give gifts to our girlfriend because we like to make her happy. We bring a hostess gift to show appreciation when we’re invited to dinner. We donate to charity or mentor young people because we’re making the world a better place.

The world of market norms is transactional. We pay for something or get paid for something, and we expect to get our money’s worth. “Fair” is an important part of the market norms world, and we’re quick to point out situations that don’t match our expectations about the transaction.

Dan Ariely writes that both worlds coexist peacefully as long as we have a strong firewall between them. We are happy to do things for others, but not when we get paid to do them. This phenomenon has been noted by other researchers and authors as well. When study participants are asked to do a simple task as a favor to the researcher, they outperform those who are paid for the same task. In fact, they outperform those who are paid a nominal amount (say, 50 cents) and those who are paid a relatively high amount for the same task (five dollars.)

Ariely writes that you’re much more likely to get people to volunteer to help than you would be if you offered to pay them. He cites a specific example: “A few years ago, for instance, the AARP asked some lawyers if they would offer less expensive services to needy retirees, at something like $ 30 an hour. The lawyers said no. Then the program manager from AARP had a brilliant idea: he asked the lawyers if they would offer free services to needy retirees. Overwhelmingly, the lawyers said yes. What was going on here? How could zero dollars be more attractive than $30? When money was mentioned, the lawyers used market norms and found the offer lacking, relative to their market salary. When no money was mentioned they used social norms and were willing to volunteer their time. Why didn’t they just accept the $30, thinking of themselves as volunteers who received $30? Because once market norms enter our considerations, the social norms depart.”

When the person who asked me for my time slipped a $20 bill across the table to compensate me, I was instantly offended, in part because my time is worth much more than that. When people I offer to help ask about my hourly rates, I usually laugh and tell them they couldn’t afford me. My advice will also be more brilliant if it’s free; trust me on this. The moment you pay for something, you look at it differently.

The moment you introduce market norms into a social situation, you have poisoned the social norms. And Ariely’s research indicates that it’s very hard to get the social norms back.

So never mention money on a date or talk about the cost of a gift or an evening of entertainment.  And never offer to pay someone for helping you unless it’s clear you’re hiring them in the first place. It will ruin their pleasure in helping you and probably ruin your ability to appreciate their help. Irrational, possibly, but also predictable.

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