Description
Economic interdependence is a consequence of specialization, or the division of labor, and is almost universal. The participants in an economic system are dependent on others for the products they cannot produce efficiently for themselves.
Case Study on Regulatory Focus and Economic Interdependence
Regulatory Focus and Interdependent Economic Decision-Making
2 Abstract Traditional theories of self-interest cannot predict when individuals pursue relative and absolute economic outcomes in interdependent decision-making, but we argue that regulatory focus (Higgins, 1997) can. We propose that a concern with security (prevention focus) motivates concerns with social status, leading to the regulation of relative economic outcomes, but a concern with growth (promotion focus) motivates the maximization of opportunities, leading to a focus on absolute outcomes. Two studies supported our predictions; regardless of prosocial or proself motivations, a promotion focus yielded greater concern with absolute outcomes, but a prevention focus yielded greater concern with relative outcomes. Also, Study 3 revealed that a prevention focus led to a greater rejection of a negative relative but positive absolute outcome in an ultimatum game because of concerns with status. This research reveals that apparently opposing orientations to interdependence - equality and relative gain - serve the same selfregulatory purpose: the establishment of security. Words: 149 Keywords: regulatory focus, economic outcomes, relative value, absolute value, interdependence, social orientations
3 Regulatory Focus and Interdependent Economic Decision-Making The economics literature largely assumes that individuals seek to maximize absolute economic outcomes. As John Stuart Mill (1874/1968) asserted, individuals generally pursue "the greatest amount of necessaries, conveniences, and luxuries" (p. 144). From this perspective, deviations from maximizing absolute outcomes are irrational and non-normative. Yet strikingly, since the first empirical demonstrations (Messick & Thorngate, 1967; Stouffer, Schuman, DeVinney, Star, & Williams, 1949), evidence has established that individuals also seek to regulate relative economic outcomes (i.e., the difference between their and others' outcomes; e.g., Loewenstein, Thompson, & Bazerman, 1989; Messick & McClintock, 1968), and that relative outcomes may have important consequences for individual well-being (Oishi, Kesebir, & Diener, 2011). Although current motivational theories of interdependent decision-making can explain the pursuit of absolute outcomes by determining degree of self-interest (Siegel & Fouraker, 1960), self-versus-shared interest (Deutsch, 1973), or a combination of these perspectives (Carnevale & De Dreu, 2006; Pruitt & Rubin, 1986), they cannot explain the pursuit of relative outcomes. This paper offers an explanation for this phenomenon using regulatory focus theory - i.e., a theory of how individuals approach self-interest. Regulatory focus theory (Higgins, 1997; see Scholer & Higgins, 2011 for a recent review) distinguishes between two approaches to a goal: focusing on security and minimizing negative outcomes (a prevention focus) or focusing on growth and maximizing positive outcomes (a promotion focus). Regulatory focus has been shown to affect a wide variety of outcomes, including self-motivation (e.g., Leonardelli & Lakin, 2010; Leonardelli, Lakin, & Lakin, 2007), decision-making (e.g., Brockner, Paruchuri, Idson, & Higgins, 2002; Liberman, Idson, Camacho, & Higgins, 1999), and social interaction and interdependence (e.g., Bohns et al., in press;
4 Sassenberg & Woltin, 2008; Shah, Brazy, & Higgins, 2004; Trawalter & Richeson, 2006). More importantly, for our purposes, it affects interdependent economic decision-making: in negotiations, a promotion compared to prevention focus led negotiators to set higher aspirations, negotiate more aggressively, and achieve better joint and personal outcomes (Galinsky, Leonardelli, Okhuysen, & Mussweiler, 2005). From the lens of existing theories on self-interest, it is tempting to conclude from Galinsky et al.'s (2005) data that a prevention focus leads to a greater "prosocial" than "proself" orientation (Deutsch, 1973) or a weaker motivation for self-interest (Siegel & Fouraker, 1960). However, this paper offers an alternative perspective: regulatory focus affects the kinds of economic outcomes (i.e., absolute or relative) individuals pursue. Building on research on regulatory focus and goal pursuit (e.g., Crowe & Higgins, 1997; Friedman, 1999), we argue that a promotion focus motivates decision-makers to maximize absolute economic outcomes, but a prevention focus motivates them to consider relative outcomes. Independent versus Interdependent Economic Decision-Making Imagine a person is given a choice between receiving $8 or $10. Which would she choose? In this decision, there is only one type of economic metric available: absolute outcomes. Economics theories suggest that rational people invariably choose $10, because it provides access to more resources, goods, and opportunities (DeVoe & Iyengar, 2010). Now imagine the person is given a choice between an outcome where she and another person each receives $8 and an outcome where she receives $10 but the other person receives $12. Here she can consider multiple pieces of information: her absolute outcomes, the other person's outcomes, and the outcome differences between the two parties. Although classical theories of self-interest (e.g., Hamner & Harnett, 1975; Mill, 1874/1968; Siegel & Fouraker,
5 1960) argue that individuals are primarily concerned with maximizing their own (and at times others') absolute outcomes, psychological and sociological research has consistently demonstrated that individuals also consider relative outcomes in interdependent decisions like the one above. For example, individuals strongly reject negative relative outcomes (Loewenstein et al., 1989; Crosby, 1976; Guth, Schmittberger, & Schwarze, 1982; Stouffer et al., 1949) and try to establish relative advantage (Messick & McClintock, 1968; Eek & Garling, 2006; Knight & Dubro, 1984; Snidal, 1991; Waltz, 1979). Psychological theories including social comparison
theory (Festinger, 1954; Suls & Wheeler, 2000), social identity theory (Tajfel & Turner, 1986; Turner, 1975; see also Scheepers, Spears, Doosje, & Manstead, 2006), and equity theory (Adams, 1965) tend to converge on a common explanation that relative outcomes provide value via social status (i.e., a perception that one is better, more important, and more valuable than others). In order to secure social status, individuals may sacrifice absolute outcomes for relative outcomes. Overall, past research reveals that people consider both absolute and relative outcomes in making interdependent economic decisions. We argue that individuals' preference for one type of outcome versus the other can be predicted by regulatory focus theory. Regulatory Focus and Interdependent Economic Decision-Making Returning to the simple decision between receiving $8 and $10, how might regulatory focus affect this decision? It should not. Outside interdependent contexts, promotion and prevention focus should result in a preference for $10, whether one views $10 as a $2 gain over $8 (a promotion focus) or views $8 as a $2 loss to $10 (a prevention focus). However, in interdependent contexts where relative outcomes are also available to consider, we expect
6 individuals' decisions will be guided by preferences for absolute outcomes when in a promotion focus, and by preferences for relative outcomes when in a prevention focus. Promotion Focus and Absolute Outcomes When making an interdependent decision, individuals with a promotion focus will primarily consider absolute economic outcomes because they focus on advancement and opportunity. Previous research suggests that individuals with a promotion focus do not want to "miss out" on opportunities to make progress toward desired results (Crowe & Higgins, 1997). Thus, such individuals should be concerned with obtaining as much as they can. Having more absolute economic outcomes allows individuals to obtain more ends and access more opportunities (e.g., to purchase any item on eBay). Any amount of money that is forsaken in order to increase one's relative outcomes compared to another person—for example, accepting $8 instead of $10 in the interdependent situation described above—represents missed opportunities that could have been pursued with that money. Whereas increasing absolute outcomes create a range of additional opportunities, the opportunities gained by increasing relative outcomes are more restricted. The vast majority of the time, having more money than another person serves a purely symbolic value, i.e., as a signal of status, which we elaborate on below, without presenting any tangible opportunities. Having more than another person has advantages primarily in instances where one tries to outbid the other party over the same end (e.g., to buy the same item on eBay), which are likely to be rare. Thus, relative outcomes are unlikely to be seen as an opportunity to acquire more desired ends. In sum, individuals in a promotion focus should be more concerned with absolute outcomes than relative outcomes, because probabilistically absolute outcomes offer more potential opportunities. Prevention Focus and Relative Outcomes
7 Individuals in a prevention focus are expected to be more concerned than those in a promotion focus with relative outcomes when making interdependent economic decisions. These individuals are concerned with security and safety, and, consequently, are strongly motivated to secure themselves against any possibility of loss (Friedman, 1999; Roese, Hur, & Pennington, 1999). For example, there are multiple routes to secure a house (e.g., lock the doors and windows, set the alarm, and tell the neighbors you'll be away). To ensure their house is safe, individuals in a prevention focus will ensure that no possible route is left unsecured (Friedman, 1999). Similarly, although competition with another party over the same end is probabilistically rare, leaving such a possibility open is analogous to leaving a single door in one's house unlocked. Therefore, individuals in a prevention focus might reject options with disadvantageous relative outcomes (i.e., self gets $10, other gets $12) despite the opportunities presented by its greater absolute value, because such an option leaves open the possibility of loss. Colloquially, an individual's relative advantage or disadvantage compared to others is known as "status" (Adams, 1965; Tajfel & Turner, 1986), defined by Merriam-Webster (2012) as a "position or rank in relation to others". In contrast to value determined through absolute measures, status implies that one's value and importance are relative. For these reasons, although individuals in a prevention focus may not be more prosocial, they may be more concerned with socially defined, or relative, value -- i.e., status (cf., Zhang, Higgins, & Chen, 2011). We propose that the concern with status will cause individuals in a prevention focus to be willing to sacrifice absolute gains and opportunities to avoid relative disadvantage. The connection between prevention focus and concerns with status has not been previously tested, but some evidence supports this link. Oyserman, Uskul, Yoder, Nesse, and Williams (2007) found that making participants' stigmatized social category membership salient
8 made them more prevention-focused. They also found that participants primed with a prevention focus were more likely than those primed with a promotion focus to interpret an ambiguous situation (i.e., receiving a negative performance review) as involving unfair social treatment (i.e., racial discrimination). Because perceptions of unfair social treatment are driven in part by concerns with low social status (Crocker, Major, & Steele, 1998; Leonardelli & Tormala, 2003), it is reasonable to extrapolate from this research that a prevention focus might also lead to stronger concerns with status than a promotion focus. That is, low social status, like stigmatization, may similarly be associated with vigilance and prevention. In sum, we predict that, when making interdependent economic decisions, individuals in a promotion focus will be more concerned with absolute outcomes whereas those in a prevention focus will be more concerned with relative outcomes. We tested our theory in three studies, using different interdependent decision-making contexts. Study 1: The Ring Measure The most direct way to test our theory is to test how regulatory focus influences interdependence orientations (Messick & McClintock, 1968), which refer to individuals' intentions or goals with interdependence. Interdependence orientations have been investigated across domains - including social dilemmas (e.g., Messick & McClintock, 1968), intergroup relations (e.g., Tajfel, Billing, Bundy, & Flament, 1971), and negotiations (e.g., De Dreu & Van Lange, 1995). This research reveals that four orientations are typically exhibited (Bornstein et al., 1983; Brewer & Silver, 1978; Eek & Garling, 2006; Knight & Dubro, 1984; Tajfel et al., 1971; Van Lange, 1999): equality (i.e., to minimize differences in outcomes), joint gain (i.e., to maximize total value for both parties), relative gain (i.e., to maximize own outcome over other party), and self gain (i.e., to maximize own outcome). Although these orientations are usually
9 classified as prosocial (equality, joint gain) or proself (relative gain, self gain), they can also be classified as focusing on outcomes that are relative (relative gain, equality) or absolute (self gain, joint gain; see Table 1). We refer to this second dimension as "economic orientation." We used a well-validated measure to identify the interdependence orientation that one most consistently exhibits—the ring measure (Griesinger & Livingston, 1973; Liebrand, 1984)— and we expected individuals in a promotion focus would be more likely to exhibit absolute orientations and those in a prevention focus would be more likely to exhibit relative orientations. Method University of Toronto undergraduates (N=184) participated for course credit or $5. Participants were seated at computers and told they would be completing an online decisionmaking task with other participants. As the program was supposedly establishing a network connection with the other participants, the actual participants were asked to complete an ostensibly unrelated essay task, which was the regulatory focus manipulation (similar to Higgins Roney, Crowe, & Hymes, 1994). Students were asked to write about an academic goal and were randomly assigned to write about either "the negative and goal-obstructing things and behaviors you will avoid to realize this goal" (prevention) or "the positive and goal-facilitating things and behaviors you will approach to realize this goal" (promotion). After the regulatory focus manipulation, participants reported whether they planned to complete the resource allocation task by "approaching positivity" (a promotion strategy) or "avoiding negativity" (a prevention strategy). The participants who answered inconsistently with their experimental conditions were asked to re-complete the manipulation until they answered correctly. Participants then completed the ring measure: they evaluated which payoff in a series of 24 payoff pairs they preferred. Each payoff represented a pair of "self" and "other" outcomes.
10 payoffs were generated from a circle on a self-other outcome plane, defined by orthogonal dimensions of self-outcome and other-outcome (Figure 1; for more details, see Van Lange, 1999). All participants reported that they understood the ring measure's instructions. To identify each participant's dominant orientation, a k-means cluster analysis (Knight & Dubro, 1984) was used. Because participants' choice on any given pair of payoffs could be a function of multiple orientations, the responses on the 24 payoff pairs were summarized into five indices that represent the extent to which the participant's responses consistently exhibited self gain, joint gain, equality, relative gain, and altruism1. These measures could range from -1 to 1, where 1 meant the orientation was exhibited consistently (van Lange, 1999). However, these indices, although conceptually distinct, were derived from the same payoff and thus were sometimes artificially associated with each other. For example, even though self gain and relative gain are theoretically and empirically distinct, for more than half of the 24 payoff pairs, the participant would have chosen the same response. To address these mathematical artifacts, we submitted participants' responses on the five indices to a k-means cluster analysis, classifying participants based on how well their responses conformed to the ideal response pattern dictated by each of the five orientations. For example, exhibiting pure relative gain would yield an ideal response pattern as follows: relative gain index = 1, self gain index = .71, equality index = 0, joint gain index = 0, and altruism index = -.71. Participants whose responses more closely conformed to this pattern than to the patterns dictated by the other four orientations were classified as exhibiting relative gain. Results and Discussion
1
Altruism, defined as maximizing only other party's outcomes, is rarely observed in previous research, but we included it in the analysis to allow participants' responses to be classified as altruistic.
11 Consistent with previous research (e.g., Eek & Garling, 2006), most participants (183/184 = 99%) exhibited equality, joint gain, relative gain or self gain (Table 2); only one exhibited altruism and was excluded from the analyses. Because orientation responses are dependent on one another (the responses for three orientations determine responses for the fourth), it was necessary to conduct a series of binary logistic regression analyses using the relative frequency of the four orientations (Cohen, Cohen, West, & Aiken, 2003; Fox, 1997). We first examined whether regulatory focus predicted differences in social orientation and then tested whether it predicted economic orientation within each social orientation. Interdependence orientations were classified as prosocial (0) or proself (1). Regulatory focus did not predict social orientation, b = -.14, p = .65, requiv=.06. Of those with prosocial orientations, responses were then classified as equality (0) or joint gain (1); analysis revealed that equality was exhibited more by individuals with a prevention focus (20/34 = 58.8%; CI95%=42.3%,75.6%) than promotion focus (12/40 = 30%; CI95%=15.8%,44.2%; Table 2), b = 1.20, p = .014, requiv=.28. Of those with proself orientations, responses were classified as relative gain (0) or self gain (1); analysis revealed that relative gain was exhibited significantly more by those with a prevention focus (25/56 = 44.6%; CI95%=31.6%,56.7%) than promotion focus (7/53 = 16.4%; CI95%=4.0%,22.3%; Table 2), b = 1.67, p< .001, requiv=.31. Consistent with predictions, Study 1 revealed that individuals with a promotion focus preferred absolute orientations and those with a prevention focus preferred relative orientations. Study 2: Multiple Alternative Matrices The second study was conducted to replicate Study 1 with a different manipulation of regulatory focus and a new measure that assesses multiple orientation preferences
12 simultaneously. We expected a promotion focus to yield a preference for absolute orientations, and a prevention focus to yield a preference for relative orientations. Treating economic orientation as a within-participant factor, regulatory focus was expected to interact with economic orientation to predict orientation preferences. Furthermore, we explored whether our predictions would manifest in ways that were consistent with participants' social motivation. Although we expected the interaction between regulatory focus and economic orientation to occur regardless of an individual's social motivation, we expected the predicted interaction to manifest on joint gain and equality when individuals are motivated to be prosocial, but to manifest on self gain and relative gain when they are motivated to be proself. In the context of the current study's mixed design - which consisted of between-participant manipulations of regulatory focus (promotion, prevention) and social motivation (to be prosocial, to be proself), and within-participant preference measures for social orientations (prosocial, proself) and economic orientations (absolute, relative) - this prediction would be indicated by a four-way interaction. Method University of Toronto undergraduates (N=134) participated for course credit. They first completed a regulatory focus manipulation (Lockwood, Jordan, & Kunda, 2002) in which they were presented a list of 36 words (randomly ordered) and were asked to categorize the words into three categories. Twelve words were fruit-related and twelve animal-related. The final 12 words were related to either promotion (e.g., gain, achieve) or prevention (e.g., avoid, prevent) depending on the priming condition. All participants completed the regulatory focus manipulation correctly.
13 Participants then read an ostensibly unrelated scenario: They have purchased a computer from a salesperson and found out that it came with a rebate, and now, they needed to negotiate with the salesperson to divide the rebate. We manipulated participants' motivation to be prosocial or proself by telling participants the salesperson was either helpful (prosocial) or rude (proself; Loewenstein et al., 1989). The four interdependent orientations were explained to participants with descriptions and payoff examples (Bornstein et al., 1983): self gain (47 for self, 30 for other), relative gain (42 for self, 22 for other), joint gain (44 for self, 36 for other), and equality (34 for self, 34 for other). They reported their a) preference for and b) intention to adopt each orientation using a 7-point scale (1=not at all, 7=very much; Gaertner & Insko, 2000). Internal consistencies were acceptable (.70
Economic interdependence is a consequence of specialization, or the division of labor, and is almost universal. The participants in an economic system are dependent on others for the products they cannot produce efficiently for themselves.
Case Study on Regulatory Focus and Economic Interdependence
Regulatory Focus and Interdependent Economic Decision-Making
2 Abstract Traditional theories of self-interest cannot predict when individuals pursue relative and absolute economic outcomes in interdependent decision-making, but we argue that regulatory focus (Higgins, 1997) can. We propose that a concern with security (prevention focus) motivates concerns with social status, leading to the regulation of relative economic outcomes, but a concern with growth (promotion focus) motivates the maximization of opportunities, leading to a focus on absolute outcomes. Two studies supported our predictions; regardless of prosocial or proself motivations, a promotion focus yielded greater concern with absolute outcomes, but a prevention focus yielded greater concern with relative outcomes. Also, Study 3 revealed that a prevention focus led to a greater rejection of a negative relative but positive absolute outcome in an ultimatum game because of concerns with status. This research reveals that apparently opposing orientations to interdependence - equality and relative gain - serve the same selfregulatory purpose: the establishment of security. Words: 149 Keywords: regulatory focus, economic outcomes, relative value, absolute value, interdependence, social orientations
3 Regulatory Focus and Interdependent Economic Decision-Making The economics literature largely assumes that individuals seek to maximize absolute economic outcomes. As John Stuart Mill (1874/1968) asserted, individuals generally pursue "the greatest amount of necessaries, conveniences, and luxuries" (p. 144). From this perspective, deviations from maximizing absolute outcomes are irrational and non-normative. Yet strikingly, since the first empirical demonstrations (Messick & Thorngate, 1967; Stouffer, Schuman, DeVinney, Star, & Williams, 1949), evidence has established that individuals also seek to regulate relative economic outcomes (i.e., the difference between their and others' outcomes; e.g., Loewenstein, Thompson, & Bazerman, 1989; Messick & McClintock, 1968), and that relative outcomes may have important consequences for individual well-being (Oishi, Kesebir, & Diener, 2011). Although current motivational theories of interdependent decision-making can explain the pursuit of absolute outcomes by determining degree of self-interest (Siegel & Fouraker, 1960), self-versus-shared interest (Deutsch, 1973), or a combination of these perspectives (Carnevale & De Dreu, 2006; Pruitt & Rubin, 1986), they cannot explain the pursuit of relative outcomes. This paper offers an explanation for this phenomenon using regulatory focus theory - i.e., a theory of how individuals approach self-interest. Regulatory focus theory (Higgins, 1997; see Scholer & Higgins, 2011 for a recent review) distinguishes between two approaches to a goal: focusing on security and minimizing negative outcomes (a prevention focus) or focusing on growth and maximizing positive outcomes (a promotion focus). Regulatory focus has been shown to affect a wide variety of outcomes, including self-motivation (e.g., Leonardelli & Lakin, 2010; Leonardelli, Lakin, & Lakin, 2007), decision-making (e.g., Brockner, Paruchuri, Idson, & Higgins, 2002; Liberman, Idson, Camacho, & Higgins, 1999), and social interaction and interdependence (e.g., Bohns et al., in press;
4 Sassenberg & Woltin, 2008; Shah, Brazy, & Higgins, 2004; Trawalter & Richeson, 2006). More importantly, for our purposes, it affects interdependent economic decision-making: in negotiations, a promotion compared to prevention focus led negotiators to set higher aspirations, negotiate more aggressively, and achieve better joint and personal outcomes (Galinsky, Leonardelli, Okhuysen, & Mussweiler, 2005). From the lens of existing theories on self-interest, it is tempting to conclude from Galinsky et al.'s (2005) data that a prevention focus leads to a greater "prosocial" than "proself" orientation (Deutsch, 1973) or a weaker motivation for self-interest (Siegel & Fouraker, 1960). However, this paper offers an alternative perspective: regulatory focus affects the kinds of economic outcomes (i.e., absolute or relative) individuals pursue. Building on research on regulatory focus and goal pursuit (e.g., Crowe & Higgins, 1997; Friedman, 1999), we argue that a promotion focus motivates decision-makers to maximize absolute economic outcomes, but a prevention focus motivates them to consider relative outcomes. Independent versus Interdependent Economic Decision-Making Imagine a person is given a choice between receiving $8 or $10. Which would she choose? In this decision, there is only one type of economic metric available: absolute outcomes. Economics theories suggest that rational people invariably choose $10, because it provides access to more resources, goods, and opportunities (DeVoe & Iyengar, 2010). Now imagine the person is given a choice between an outcome where she and another person each receives $8 and an outcome where she receives $10 but the other person receives $12. Here she can consider multiple pieces of information: her absolute outcomes, the other person's outcomes, and the outcome differences between the two parties. Although classical theories of self-interest (e.g., Hamner & Harnett, 1975; Mill, 1874/1968; Siegel & Fouraker,
5 1960) argue that individuals are primarily concerned with maximizing their own (and at times others') absolute outcomes, psychological and sociological research has consistently demonstrated that individuals also consider relative outcomes in interdependent decisions like the one above. For example, individuals strongly reject negative relative outcomes (Loewenstein et al., 1989; Crosby, 1976; Guth, Schmittberger, & Schwarze, 1982; Stouffer et al., 1949) and try to establish relative advantage (Messick & McClintock, 1968; Eek & Garling, 2006; Knight & Dubro, 1984; Snidal, 1991; Waltz, 1979). Psychological theories including social comparison
theory (Festinger, 1954; Suls & Wheeler, 2000), social identity theory (Tajfel & Turner, 1986; Turner, 1975; see also Scheepers, Spears, Doosje, & Manstead, 2006), and equity theory (Adams, 1965) tend to converge on a common explanation that relative outcomes provide value via social status (i.e., a perception that one is better, more important, and more valuable than others). In order to secure social status, individuals may sacrifice absolute outcomes for relative outcomes. Overall, past research reveals that people consider both absolute and relative outcomes in making interdependent economic decisions. We argue that individuals' preference for one type of outcome versus the other can be predicted by regulatory focus theory. Regulatory Focus and Interdependent Economic Decision-Making Returning to the simple decision between receiving $8 and $10, how might regulatory focus affect this decision? It should not. Outside interdependent contexts, promotion and prevention focus should result in a preference for $10, whether one views $10 as a $2 gain over $8 (a promotion focus) or views $8 as a $2 loss to $10 (a prevention focus). However, in interdependent contexts where relative outcomes are also available to consider, we expect
6 individuals' decisions will be guided by preferences for absolute outcomes when in a promotion focus, and by preferences for relative outcomes when in a prevention focus. Promotion Focus and Absolute Outcomes When making an interdependent decision, individuals with a promotion focus will primarily consider absolute economic outcomes because they focus on advancement and opportunity. Previous research suggests that individuals with a promotion focus do not want to "miss out" on opportunities to make progress toward desired results (Crowe & Higgins, 1997). Thus, such individuals should be concerned with obtaining as much as they can. Having more absolute economic outcomes allows individuals to obtain more ends and access more opportunities (e.g., to purchase any item on eBay). Any amount of money that is forsaken in order to increase one's relative outcomes compared to another person—for example, accepting $8 instead of $10 in the interdependent situation described above—represents missed opportunities that could have been pursued with that money. Whereas increasing absolute outcomes create a range of additional opportunities, the opportunities gained by increasing relative outcomes are more restricted. The vast majority of the time, having more money than another person serves a purely symbolic value, i.e., as a signal of status, which we elaborate on below, without presenting any tangible opportunities. Having more than another person has advantages primarily in instances where one tries to outbid the other party over the same end (e.g., to buy the same item on eBay), which are likely to be rare. Thus, relative outcomes are unlikely to be seen as an opportunity to acquire more desired ends. In sum, individuals in a promotion focus should be more concerned with absolute outcomes than relative outcomes, because probabilistically absolute outcomes offer more potential opportunities. Prevention Focus and Relative Outcomes
7 Individuals in a prevention focus are expected to be more concerned than those in a promotion focus with relative outcomes when making interdependent economic decisions. These individuals are concerned with security and safety, and, consequently, are strongly motivated to secure themselves against any possibility of loss (Friedman, 1999; Roese, Hur, & Pennington, 1999). For example, there are multiple routes to secure a house (e.g., lock the doors and windows, set the alarm, and tell the neighbors you'll be away). To ensure their house is safe, individuals in a prevention focus will ensure that no possible route is left unsecured (Friedman, 1999). Similarly, although competition with another party over the same end is probabilistically rare, leaving such a possibility open is analogous to leaving a single door in one's house unlocked. Therefore, individuals in a prevention focus might reject options with disadvantageous relative outcomes (i.e., self gets $10, other gets $12) despite the opportunities presented by its greater absolute value, because such an option leaves open the possibility of loss. Colloquially, an individual's relative advantage or disadvantage compared to others is known as "status" (Adams, 1965; Tajfel & Turner, 1986), defined by Merriam-Webster (2012) as a "position or rank in relation to others". In contrast to value determined through absolute measures, status implies that one's value and importance are relative. For these reasons, although individuals in a prevention focus may not be more prosocial, they may be more concerned with socially defined, or relative, value -- i.e., status (cf., Zhang, Higgins, & Chen, 2011). We propose that the concern with status will cause individuals in a prevention focus to be willing to sacrifice absolute gains and opportunities to avoid relative disadvantage. The connection between prevention focus and concerns with status has not been previously tested, but some evidence supports this link. Oyserman, Uskul, Yoder, Nesse, and Williams (2007) found that making participants' stigmatized social category membership salient
8 made them more prevention-focused. They also found that participants primed with a prevention focus were more likely than those primed with a promotion focus to interpret an ambiguous situation (i.e., receiving a negative performance review) as involving unfair social treatment (i.e., racial discrimination). Because perceptions of unfair social treatment are driven in part by concerns with low social status (Crocker, Major, & Steele, 1998; Leonardelli & Tormala, 2003), it is reasonable to extrapolate from this research that a prevention focus might also lead to stronger concerns with status than a promotion focus. That is, low social status, like stigmatization, may similarly be associated with vigilance and prevention. In sum, we predict that, when making interdependent economic decisions, individuals in a promotion focus will be more concerned with absolute outcomes whereas those in a prevention focus will be more concerned with relative outcomes. We tested our theory in three studies, using different interdependent decision-making contexts. Study 1: The Ring Measure The most direct way to test our theory is to test how regulatory focus influences interdependence orientations (Messick & McClintock, 1968), which refer to individuals' intentions or goals with interdependence. Interdependence orientations have been investigated across domains - including social dilemmas (e.g., Messick & McClintock, 1968), intergroup relations (e.g., Tajfel, Billing, Bundy, & Flament, 1971), and negotiations (e.g., De Dreu & Van Lange, 1995). This research reveals that four orientations are typically exhibited (Bornstein et al., 1983; Brewer & Silver, 1978; Eek & Garling, 2006; Knight & Dubro, 1984; Tajfel et al., 1971; Van Lange, 1999): equality (i.e., to minimize differences in outcomes), joint gain (i.e., to maximize total value for both parties), relative gain (i.e., to maximize own outcome over other party), and self gain (i.e., to maximize own outcome). Although these orientations are usually
9 classified as prosocial (equality, joint gain) or proself (relative gain, self gain), they can also be classified as focusing on outcomes that are relative (relative gain, equality) or absolute (self gain, joint gain; see Table 1). We refer to this second dimension as "economic orientation." We used a well-validated measure to identify the interdependence orientation that one most consistently exhibits—the ring measure (Griesinger & Livingston, 1973; Liebrand, 1984)— and we expected individuals in a promotion focus would be more likely to exhibit absolute orientations and those in a prevention focus would be more likely to exhibit relative orientations. Method University of Toronto undergraduates (N=184) participated for course credit or $5. Participants were seated at computers and told they would be completing an online decisionmaking task with other participants. As the program was supposedly establishing a network connection with the other participants, the actual participants were asked to complete an ostensibly unrelated essay task, which was the regulatory focus manipulation (similar to Higgins Roney, Crowe, & Hymes, 1994). Students were asked to write about an academic goal and were randomly assigned to write about either "the negative and goal-obstructing things and behaviors you will avoid to realize this goal" (prevention) or "the positive and goal-facilitating things and behaviors you will approach to realize this goal" (promotion). After the regulatory focus manipulation, participants reported whether they planned to complete the resource allocation task by "approaching positivity" (a promotion strategy) or "avoiding negativity" (a prevention strategy). The participants who answered inconsistently with their experimental conditions were asked to re-complete the manipulation until they answered correctly. Participants then completed the ring measure: they evaluated which payoff in a series of 24 payoff pairs they preferred. Each payoff represented a pair of "self" and "other" outcomes.
10 payoffs were generated from a circle on a self-other outcome plane, defined by orthogonal dimensions of self-outcome and other-outcome (Figure 1; for more details, see Van Lange, 1999). All participants reported that they understood the ring measure's instructions. To identify each participant's dominant orientation, a k-means cluster analysis (Knight & Dubro, 1984) was used. Because participants' choice on any given pair of payoffs could be a function of multiple orientations, the responses on the 24 payoff pairs were summarized into five indices that represent the extent to which the participant's responses consistently exhibited self gain, joint gain, equality, relative gain, and altruism1. These measures could range from -1 to 1, where 1 meant the orientation was exhibited consistently (van Lange, 1999). However, these indices, although conceptually distinct, were derived from the same payoff and thus were sometimes artificially associated with each other. For example, even though self gain and relative gain are theoretically and empirically distinct, for more than half of the 24 payoff pairs, the participant would have chosen the same response. To address these mathematical artifacts, we submitted participants' responses on the five indices to a k-means cluster analysis, classifying participants based on how well their responses conformed to the ideal response pattern dictated by each of the five orientations. For example, exhibiting pure relative gain would yield an ideal response pattern as follows: relative gain index = 1, self gain index = .71, equality index = 0, joint gain index = 0, and altruism index = -.71. Participants whose responses more closely conformed to this pattern than to the patterns dictated by the other four orientations were classified as exhibiting relative gain. Results and Discussion
1
Altruism, defined as maximizing only other party's outcomes, is rarely observed in previous research, but we included it in the analysis to allow participants' responses to be classified as altruistic.
11 Consistent with previous research (e.g., Eek & Garling, 2006), most participants (183/184 = 99%) exhibited equality, joint gain, relative gain or self gain (Table 2); only one exhibited altruism and was excluded from the analyses. Because orientation responses are dependent on one another (the responses for three orientations determine responses for the fourth), it was necessary to conduct a series of binary logistic regression analyses using the relative frequency of the four orientations (Cohen, Cohen, West, & Aiken, 2003; Fox, 1997). We first examined whether regulatory focus predicted differences in social orientation and then tested whether it predicted economic orientation within each social orientation. Interdependence orientations were classified as prosocial (0) or proself (1). Regulatory focus did not predict social orientation, b = -.14, p = .65, requiv=.06. Of those with prosocial orientations, responses were then classified as equality (0) or joint gain (1); analysis revealed that equality was exhibited more by individuals with a prevention focus (20/34 = 58.8%; CI95%=42.3%,75.6%) than promotion focus (12/40 = 30%; CI95%=15.8%,44.2%; Table 2), b = 1.20, p = .014, requiv=.28. Of those with proself orientations, responses were classified as relative gain (0) or self gain (1); analysis revealed that relative gain was exhibited significantly more by those with a prevention focus (25/56 = 44.6%; CI95%=31.6%,56.7%) than promotion focus (7/53 = 16.4%; CI95%=4.0%,22.3%; Table 2), b = 1.67, p< .001, requiv=.31. Consistent with predictions, Study 1 revealed that individuals with a promotion focus preferred absolute orientations and those with a prevention focus preferred relative orientations. Study 2: Multiple Alternative Matrices The second study was conducted to replicate Study 1 with a different manipulation of regulatory focus and a new measure that assesses multiple orientation preferences
12 simultaneously. We expected a promotion focus to yield a preference for absolute orientations, and a prevention focus to yield a preference for relative orientations. Treating economic orientation as a within-participant factor, regulatory focus was expected to interact with economic orientation to predict orientation preferences. Furthermore, we explored whether our predictions would manifest in ways that were consistent with participants' social motivation. Although we expected the interaction between regulatory focus and economic orientation to occur regardless of an individual's social motivation, we expected the predicted interaction to manifest on joint gain and equality when individuals are motivated to be prosocial, but to manifest on self gain and relative gain when they are motivated to be proself. In the context of the current study's mixed design - which consisted of between-participant manipulations of regulatory focus (promotion, prevention) and social motivation (to be prosocial, to be proself), and within-participant preference measures for social orientations (prosocial, proself) and economic orientations (absolute, relative) - this prediction would be indicated by a four-way interaction. Method University of Toronto undergraduates (N=134) participated for course credit. They first completed a regulatory focus manipulation (Lockwood, Jordan, & Kunda, 2002) in which they were presented a list of 36 words (randomly ordered) and were asked to categorize the words into three categories. Twelve words were fruit-related and twelve animal-related. The final 12 words were related to either promotion (e.g., gain, achieve) or prevention (e.g., avoid, prevent) depending on the priming condition. All participants completed the regulatory focus manipulation correctly.
13 Participants then read an ostensibly unrelated scenario: They have purchased a computer from a salesperson and found out that it came with a rebate, and now, they needed to negotiate with the salesperson to divide the rebate. We manipulated participants' motivation to be prosocial or proself by telling participants the salesperson was either helpful (prosocial) or rude (proself; Loewenstein et al., 1989). The four interdependent orientations were explained to participants with descriptions and payoff examples (Bornstein et al., 1983): self gain (47 for self, 30 for other), relative gain (42 for self, 22 for other), joint gain (44 for self, 36 for other), and equality (34 for self, 34 for other). They reported their a) preference for and b) intention to adopt each orientation using a 7-point scale (1=not at all, 7=very much; Gaertner & Insko, 2000). Internal consistencies were acceptable (.70