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Why greed is infectious

You know the saying "Greed is Good" and "Infectious Greed".  Science has proven why it's infectious …

In a study published in the March 8 early online edition of the Proceedings
of the National Academy of Sciences, researchers from the
University of California, San Diego and Harvard provide the first
laboratory evidence that cooperative behavior is contagious and that it
spreads from person to person to person …

In the current study, Fowler and Christakis show that when one person
gives money to help others in a "public-goods game," where people have
the opportunity to cooperate with each other, the recipients are more
likely to give their own money away to other people in future games.
This creates a domino effect in which one person's generosity spreads
first to three people and then to the nine people that those three
people interact with in the future, and then to still other individuals
in subsequent waves of the experiment.

The effect persists, Fowler said: "You don't go back to being your
'old selfish self.''' As a result, the money a person gives in the first
round of the experiment is ultimately tripled by others who are
subsequently (directly or indirectly) influenced to give more. "The
network functions like a matching grant," Christakis said.

It also works proportionately the other way round, e.g. if you keep your cash because you are  greedy, everyone around you becomes more greedy too.

I'm not making any comments about investment banking here …

 

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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