Regulatory focus and interdependent economic decision-making

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 self-regulatory purpose: the establishment of security.

► A prevention focus motivates people to regulate relative economic outcomes.
► A promotion focus motivates people to focus on absolute economic outcomes.
► This regulatory focus effect is observed regardless of people's prosocial or proself motivations.
► Concern with status explains the effect of regulatory focus on outcome preference.