BIO:

Andy Vonasch is an associate professor in social psychology at the University of Canterbury, in Christchurch, New Zealand. He received his BA in psychology and economics from Pomona College, conducted pre-doctoral research at Yale University, completed his PhD in psychology at Florida State University, and postdoctoral training at the University of North Carolina at Chapel Hill. His research explores the role of mind perception in moral agency: How people exercise free will and virtue, judge other people's actions and motives, and strategically protect and project their own image and reputation.

Link: https://profiles.canterbury.ac.nz/Andrew-Vonasch

Abstract:

If money is good, then shouldn’t more money always be better? Perhaps not. Traditional economic theories suggest that money is an ever-increasing incentivizer. If someone will accept a job for US$20/hr, they should be more likely to accept the same job for US$30/hr and especially for US$250/hr. However, 10 preregistered, high-powered studies (N = 4,205, in the United States and Iran) reveal how increasing incentives can backfire. Overly generous offers lead people to infer “phantom costs” that make them less likely to accept high job wages, cheap plane fares, and free money. We present a theory for understanding when and why people imagine these hidden drawbacks and show how phantom costs drive judgments, impact behavior, and intersect with individual differences. Phantom costs change how we should think about “economic rationality.” Economic exchanges are not merely about money but instead are social interactions between people trying to perceive (and deceive) each other’s minds.