Pricing the sacred

Why does offering money for certain things make the offer worse rather than more attractive?

The ordinary picture of an offer is a dial. If someone will not do it for nothing, perhaps they will for fifty pounds; if not fifty, then five hundred. Money is supposed to be the universal sweetener, so turning the dial up can only move an agreement closer. Yet everyone has met the offers where it does the opposite — cash pressed on a friend who helped you move, a sum named to a neighbourhood asked to host a waste dump. The money does not merely fail. It makes the offer worse. What has to be true of a value for a larger number to reduce the chance of a yes?

Start with what people actually do, which is not simply refuse. They take offence. Philip Tetlock's studies of what he called taboo trade-offs put participants in front of a hospital administrator deliberating whether a child's operation was worth its cost against other uses of the money. The common reaction was not "he reached the wrong answer" but anger that he had weighed it at all — and afterwards a measurable urge toward moral cleansing, volunteering or reaffirming the value, as though contemplation itself had left a mark. If merely thinking about the exchange is contaminating, then refusing quickly is not stubbornness; it is the whole point. A long deliberation would be evidence that you are the sort of person who might sell.

That gives us protected values, in Jonathan Baron and Mark Spranca's phrase: values people hold as resisting trade-off against anything, and against money most sharply. But now a puzzle. If the value is absolute, money should simply be irrelevant — the offer should fail, not backfire. And yet Bruno Frey and Felix Oberholzer-Gee asked residents of a Swiss village whether they would accept a nuclear waste repository nearby. Framed as a civic duty, roughly half agreed. When substantial compensation was added to the same question, support fell to about a quarter, and raising the sum did not recover it. The money did not slide the answer along the existing scale. It replaced the scale.

Now the case that shows the mechanism most cleanly. Uri Gneezy and Aldo Rustichini studied day-care centres in Haifa that introduced a small fine for collecting a child late. Late collections roughly doubled, and stayed up. Read that as a price, and it explains itself: parents had been punctual because lateness wronged a member of staff waiting past the end of her day, and a debt of that kind has no settlement. The fine turned an unpriced wrong into a service with a rate. Once you are buying something, you buy as much as you want and owe nothing further.

The revealing detail is what happened when the fine was withdrawn after several weeks. Lateness did not return to its old level. Why should the frame flip so easily one way and not back? Because a price is explicit, public and unambiguous about what kind of relationship this is, while an unpriced obligation has to be inferred from context. Removing the charge removes the charge; it does not restore the inference.

Which suggests what the number is really doing. Inside a market frame, a price says how much. Inside a moral frame it says what kind of thing this is — and any finite figure asserts that the thing is the sort that has one. So raising the offer does not soften the insult. It makes it more precise.

None of this says money corrupts. Most things are better with prices, and the argument only bites on the small class of goods people treat as constitutive of who they are rather than as items they hold.

It helps to keep two mechanisms apart, because they are usually run together. One is expressive: attaching a price declares that the thing is tradable, which is an assertion about its category, and the offence scales with how conspicuous the declaration is. The other is motivational crowding: an external incentive displaces the internal or social motive that was already doing the work, and the displacement can outlast the incentive. The Swiss survey is mostly the first. Haifa is mostly the second, and its lasting effect is the tell.

Three honest qualifications. Haifa was one field experiment across ten centres; it is heavily cited, but the size and generality of motivation crowding are still argued, and the Swiss result measured stated willingness rather than behaviour. Second, sacred values are less absolute than they present — Tetlock distinguished taboo trade-offs from tragic ones, where a sacred value is weighed against another sacred value, and those people accept with difficulty rather than outrage. Third, governments price life and safety constantly, and it is largely tolerated, which suggests what triggers the reaction is not the trade-off but its being made explicit in front of you.

• Whether a payment can be designed to read as recognition rather than purchase, as some blood and organ-donation schemes attempt.
• How Tetlock's tragic trade-offs are made bearable in medicine and disaster triage, where they cannot be avoided.

Every term the collection defines is gathered in the glossary.