The Economics of Men Behaving Badly
By Cathering Rampell
June 9, 2011, 10:00 am ，From NY Times.
Maureen Dowd, among others, observed in Tuesday’s paper that many of the recent examples of men behaving badly were perpetrated by men married to powerful, independently successful wives, on whom some of the cheaters were financially dependent. And with so much political power and celebrity of their own at stake, there was even more reason to avoid boneheaded decisions like texting crotch-shots to strangers or impregnating the housekeeper.
In economic terms, the risk-reward trade-off just didn’t make sense.
Traditional economics would argue that illegal or immoral behavior should be most attractive to people who have little to lose. And yet successful people who have very high opportunity costs are still engaging in royally dumb activities.
In fact, some researchers have argued that people with more to lose may be more likely to engage in risky, socially unacceptable and self-destructive behavior.
For example, Utpal Bhattacharya and Cassandra D. Marshall of Indiana University-Bloomington have looked into what kinds of people are more likely to engage in insider-trading. The answer? The best-paid executives.
From the paper’s abstract:
Using a sample of all top management who were convicted of illegal insider trading in the United States for trades during the period 1989-2002, we explore the economic rationality of this white-collar crime. If this crime is an economically rational activity in the sense of Becker (1968), where a crime is committed if its expected benefits exceed its expected costs, “poorer” top management should be doing the most illegal insider trading. This is because the “poor” have more to gain (an extra dollar means more to them) and less to lose (loss of reputation and future compensation if caught is lower for them). We find in the data, however, that convictions are concentrated in the “richer” strata after we control for firm size, industry, firm growth opportunities, the opportunity to commit illegal insider trading, and the possibility that regulators target the “richer” strata. We thus cannot rule out psychological motives (like hubris) or sociological motives (like company culture) behind this white-collar crime.
Maybe power breeds hubris rather than actuarially-calibrated caution. But relative powerlessness somehow seems to have the same effect.
One controversial study by Christin L. Munsch, a doctoral candidate in sociology at Cornell, found that men who are more financially dependent on their wives are more likely to cheat. Again, this goes against what economics would predict, but seems to indicate that a lower level of power and threatened masculinity may also tempt men to transgress.
In related work — which we’ve blogged about before — a study examined the popular trope of the “Oscar Curse,” popularized by the revelation that Sandra Bullock’s husband was caught cheating right after she won an Academy Award. Comparing the marital fates of female Oscar winners versus female Oscar nominees, the research found that Oscar winners were much more likely to have their marriages end in divorce. It did not determine whether those marriages were more likely to end because of infidelity, though.
Traditional economics would argue that illegal or immoral behavior should be most attractive to people who have little to lose.
传统经济学认为，那些没啥可失去的人更可能卷入非法或不道德的行为。
In fact, some researchers have argued that people with more to lose may be more likely to engage in risky, socially unacceptable and self-destructive behavior.
实际上，一些研究表明，拥有更多可失去的人或许更可能从事高风险、社会不相容及自我毁灭的行为。
If this crime is an economically rational activity in the sense of Becker (1968), where a crime is committed if its expected benefits exceed its expected costs, “poorer” top management should be doing the most illegal insider trading.
如果这种犯罪是贝克尔（1968）意义上的经济理性行为，即实施犯罪的期望收益大于期望成本，“相对穷”的高层管理者就会去做最不合法的内部交易。
We find in the data, however, that convictions are concentrated in the “richer”……。
但数据显示，实施内部交易犯罪的群体主要集中于“相对富”的高管。
32, 32
Men behaving badly were perpetrated by men married to powerful , independent successful wives .
Power breeds hubris rather than actuarially-calibrated caution . But relative powerlessness somehow seems to have the same effect .
Men who are more fanancially dependent on their wives are more likely to cheat .
23,23
In fact, some researchers have argued that people with more to lose may be more likely to engage in risky, socially unacceptable and self-destructive behavior越是富有的人越想着如何圈钱，如何吝啬，因此自然就会走向经济犯罪
One controversial study by Christin L. Munsch, a doctoral candidate in sociology at Cornell, found that men who are more financially dependent on their wives are more likely to cheat.
这句话很有意思，犯罪时为了疼老婆 嘿嘿
the research found that Oscar winners were much more likely to have their marriages end in divorce. It did not determine whether those marriages were more likely to end because of infidelity, though
其实仔细想想这句话很对啊，前段时间不是姚晨离婚的事件闹得很火啊 姚晨一下子出了名，站在娱乐的风口浪尖上，老公却一直不温不火的，这种地位悬殊自然造成婚姻破裂
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I think the behavior can be fixed up by their economic situation. The rich is prone to get worse ,however ,the poor is likely to breach the law. Why do a man so difficult? To worse,Be a good man is more difficult.
32,32
The cheaters, who married to powerful and successful wives and depend on them financially, may be unfaithful because of psychological needs. In the daily life, their wives probably donimate the family and the men are under control. Their desire for being dominant, which overweighs the risk of being caught and losing reputation and fortune, is fulfilled psychologically by cheating.
PS. I’m still making preparations for the final examination and will have some free time about a week later.
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This is a quite interesting paper. But after I have seen the movie Inside Job, it provided me a little bit different perspective. The economics is established on the foundation that each man is irrational. But in cases of those engaged in inside trading, one thing I'm quite clear is that these TOP executives are not so irrational. People from TOP biz schools directors, rating agencies presidents, banking industry managers, are in a group of interest. They can afford whatever they can lose because they always desire more. People are good when he/she holds the moral ethics. But everything will become mirage when this is broken.~~
why is men unfaith? it is not fair. The desire belongs to all the human, with men and women.
although, there is high opportunity cost, the desire is infinite.
6.6
The rational/irrational explanation is apparently not enough to explain cheating behavior at very high stake. It's the internal pressure as well as the external environment that drives out a person's flipside of his or her character. I would agree with the Cornell sociologist that threatening of masculinity will cause transgression, but this phenomenon per se is not against previous conclusion that too much power will cause hubris. Arnold Schwarzeneger was the living example of such transgression, but still after his stepping down as governor (rationality can not explain). Tiger Woods would be the leading example for hubris. The lesson learned was that the propelling force should not be accumulated above certain limit and people should have a way out through communication within family. In that sense, the ancient Chinese golden mean philosophy might be a cure to all those who are attempted to go to extremes. We still have no idea whether the evolution of mankind in this direction is good or bad, but it looks like that the ever developing human productivity will need less and less masculinity and therefore cause more cheatings.
It is said that men like to be the center. And those ladies who always notice them are more likely to be loved than those who look pretty. I guess this is one of potential reasons why man with successful wife is more likely to be unfaithful. Those who have to be economically supported by their husbands have no other choices but to doing everything possible to cater to their other parts, while this case will hardly happen on successful wives, partly because they are busy, partly because of their independence.
Besides, celebrities are more likely to catch the public eyes. If they are ordinary people, no one will notice the insider-trading. But for those well-knowns, maybe even they have no intention of doing so, someone will conspire to seduce them.
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This article discuss a tradional view that rich men will less possibly commit crimes. The best-paid executives' insider-trading indicates that the rich men behave badly. I think this can be explained by Becker's benefit-cost analyse frame. The benefit of insider-trading of the top executives may be higher, so the result cannot be clear theoretically. In fact, Becker's frame is so open that it can include various of explaination. In my recent crime empirical research, the economitrics result supports that the higher income, the higher crime rate in the country. But it doesn't mean Becker and Ehrlich were wrong. There must be some invisible benefit or cost we still have not found.
OK.
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Maybe risk-preference can explain this anomaly. People perfer to committing risky behavor though they will have no gains or even suffer losses.
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