Jonah Berger Explains How A $50k Salary Is More Desirable Than $100k

In part three of our exclusive excerpt from Jonah Berger's book, "Contagious," the author and Wharton professor deconstructs game mechanics.

In Fast Company’s April issue, we’ll profile Jonah Berger, the 32-year-old Wharton professor who has become one of the world’s foremost experts on what goes viral and why. It’s easy to find examples of products or ideas that have spread and become popular, but as he writes, "It’s much harder to actually get something to catch on. Even with all the money poured into marketing and advertising, few products become popular." His new book Contagious: Why Things Catch On, being published next week by Simon & Schuster, tries to answer the question, Why do some products, ideas, and behaviors succeed when others fail? In this exclusive excerpt, which will be serialized in five parts, he explores the concept of social currency, one of the six elements Berger says helps unravel the mysteries of virality.

In today’s excerpt, Berger explores how game mechanics can be engineered to promote social currency.

I was short by 222 miles.

A few years ago I was booking a round-trip flight from the East Coast to California. It was late December, and the end of the year is always slow, so it seemed like a perfect time to visit friends.

The previous year I had flown enough on United Airlines to achieve Premier status. Calling the perks I was receiving "Premier" seemed like a marketing person’s idea of a sick joke, but it was slightly better treatment than you usually get in economy class. This year had been even busier. I had almost achieved the next status level: Premier Executive.

The perks for being a Premier Executive were only slightly better than those for Premier. I’d get to check a third bag for free, have access to special airline lounges if I flew internationally, and board the plane seconds earlier than I would have before. Nothing too exciting.

But I was so close! So I did what people do who are so focused on achieving something that they lose their common sense. I flew a circuitous route, stopping in Boston for two hours on a Philadelphia to San Francisco trip, just to make sure I had enough miles to make it over the threshold.

Experts estimate that as many as 10 trillion frequent flier miles are sitting in accounts, unused. Enough to travel to the moon and back 19.4 million times. So if they’re not actually using them, why are people so passionate about racking up miles?
Because it’s a fun game.

One way that game mechanics—the elements of a game, application, or program, including rules and feedback loops, that make them fun and compelling—motivate is internally. Discrete markers motivate us to work harder, especially when we get close to achieving them. Take the buy-ten-get-one-free coffee punch cards that are sometimes offered at local cafés. By increasing motivation, the cards actually spur people to buy coffee more frequently as they get closer to their tenth cup and claiming their reward.

But game mechanics also motivate us on an interpersonal level by encouraging social comparison.

A few years ago, students at Harvard University were asked to make a seemingly straightforward choice: Which would they prefer, a job where they made $50,000 a year (option A) or one where they made $100,000 a year (option B)?

Seems like a no-brainer, right? But there was one catch. In option A, the students would get paid twice as much as others, who would only get $25,000. In option B, they would get paid half as much as others, who would get $200,000.

What did the majority of people choose?

Option A. They preferred to do better than others, even if it meant getting less for themselves. They chose the option that was worse in absolute terms but better in relative terms.

Game mechanics help generate social currency because doing well makes us look good. People love boasting about the things they’ve accomplished: their golf handicaps, how many people follow them on Twitter, or their kids’ SAT scores. A friend of mine is a Delta Airlines Platinum Medallion member. Every time he flies he finds a way to brag about it on Facebook.

And this is how game mechanics boosts word of mouth. People are talking because they want to show off their achievements, but along the way they talk about the brands (Delta or Twitter) or domains (golf or the SAT) where they achieved.

Tomorrow: How to leverage game mechanics most effectively in generating social currency.

[Image: Andrew Hetherington]

Andrew Hetherington

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  • BB

    Um, most people  negotiate that rate based on what is in the market, how desperate they are, how much money they need to live, or a combination (this is a truncated list).  The example mentioned here is both misleading and does not mimic reality.  Perhaps, the author needs to investigate how much money it takes to actually live to make a claim on decision making behavior vs. data generated in a laboratory setting with no context?  

  • Guest

    This short, thoughtless article was obviously just a plug for Jonah Berger's new book.

    Jonah Berger has missed a key point regarding his "game mechanics" marketing theory. Which is that the majority of people, when they see their social media contacts bragging or talking about their mundane "accomplishments" that no one really cares about, simply click on the "Show less posts from this contact" button, or un-friend the jackass who brags about these types of things.  Not to mention, they probably come away with a more contemptible view of the brand that particular individual is promoting as well.
    It's no secret that Facebook and other social networks are trying to monetize their users data, and eventually use their users to promote products outright. And, as more people become aware of this happening, people find ways to silence this noise, or simply become annoyed by it.This article and its misleading headline show that Jonah Berger is quite good at getting your attention, and interrupting you with noise without delivering any real value. Now I'm annoyed. Jonah Berger's "get noticed quick through useless chatter" marketing tactics are backfiring here, just as they will anywhere else.

  • jac

    a headline that has absolutely nothing to do with the real point of the article. the point of the article seemed to be if you want people to talk about your brand, then create a game with your  that consumers are willing to play for perks that they can brag about. a very loose link to the salary question..seems like the salary question was taken completely out of context, to create a headline. 

  • RickWhitney

    If this is an example of what the rest of the book will be like, I'll pass.  Comments below echo my thoughts pretty well.

  • Peter Smuts

    This article does nothing to build the credibility of Mr. Berger or Fast Company.  Everyone I know who cares about frequent flier miles, cares because they use them.  They view them as a small and perhaps inadequate but nevertheless important perk of living on the road.  Miles may be a game, but the gaming part is subordinate to the value they derive from gaining the miles.  As for the study on 50/100K salaries, it seems like a classic example of an "academic" study that bears little relationship to real world decisions.   

    If this is an indication of the content of Contagious it sounds a lot like another one size fits all pop social science "study" like Blink, The Tipping Point, How We Decide, etc.  

  • Matthew G. Monroe

    I'm not quite sure what the intended takeaway from this article is supposed to be, though –– as far as my personal reading and interpretation goes –– it's that Harvard students are shockingly insecure.  Please tell me if I've missed some key point.

  • Ken

    Though my reaction matches everyone else (worthless read)... it could be fun to do a version of this game if you make some (unrealistic) constraints-

    Say there are two companies in the same city who do exactly the same work and you could take a job with either one of them - at Company A everyone who does the job you're offered except you makes 50K (and you have a way of knowing this) and at company B, everyone who does your job other than you makes 100K.  Assume there is not any way to more rapidly increase your salary at B which otherwise you'd assume had higher margins.  Start at 50K and 100K then begin to add 1K to A's offer and subtract 1K from B's offer.  What's your break even point?  In other words, if A offers 51K and B offers 99K you'd obviously take B.  But what if A offered 74K and B offered 76K?  I might take A, because working at B would lead to resentment towards your coworkers.  My 'equilibrium' is probably around 70K vs 80K... I'd hate making 20K less than peers at B, but 10K more than at A (where I'd be making 20K more than peers) is enough to "pay for it".

    Now in real life I like seeking out the job where "everyone else makes more" because eventually you can leverage that into the actual "fair market value" and then pick the next rung on the proverbial ladder... but since when did academia have anything to do with real life?

  • Marcus

    Most people's ambitions are to buy a house and perhaps pay school fees. If they are relatively wealthier these things will be easier as this is a free market. You presumably know this if you are savvy enough to do a status run on your airline. By the way that isn't pointless either as some airports only have showering facilities etc in the elite lounges which may be important before meetings and so on.

  • Real Carly Fisher

    This headline is misleading. This is an interesting idea as far as competitive nature, but I'd argue the salary compensation comparison to frequent flier miles doesn't work. Salary determination is often subjective, not objective. It's just the way you position it as a half-empty/half-full glass situation that could just as easily flip to say 50K is half of what 100,000K make and 100,000K is twice as much as other people make, which is true and how we all view things. 

  • Yshekster

    Yes, that was a moronic article. Not sure if the quoted study actually tested the right things for the question. And not sure if the conclusion was extrapolated into the right context either. 

  • Jeremy Robinson

    Agreed- dumb article. Your headline editor writes compelling headlines but your writers don't deliver the goods. Junk food journalism.

  • Chris

    This is the whole problem with kids these days, they think how many twitter followers or youtube subscribers they have define their success. Even if that success means making now money.

    I see it time and time again. Kids with these youtube channels spending all their hard earned valuable time making videos. And for what? So you can get paid 3 cents from some advertiser taking advantage of you? The young generation today is broke because they are some of the worst business people on the planet. 

    Let them keep taking the cheaper salary. That's more money in the pie for me to take. These kids better learn fast. Otherwise the world will take them buy and foreigners will own all of our corporations one day. It's already happening. 

  • Ira Dember

    "They chose the option that was worse in absolute terms but better in relative terms." Another triumph for Relativity Theory! 

  • Blevine1989

    Completeley agree with Keith Moon and HMJJBE.  Seems pretty straightforward of course you want more relative purchasing power.  Misleading headline.  Dumb article.  Back to work.

  • Hmjjbe

    the 50k/100k choice is pointless at best. If you got paid twice as much as "others" and "others"included the entire rest of the world, then yes you would always want to take the 50k option. If the"others"were made up of just people in your field(say teachers for instance) then you would be an idiot to choose the 50k option because the doctor's salary nextdoor hasn't changed a bit and you're still competing with them for goods in the market. It's an economics/inflation/purchasing power discussion and there isn't even really much discussion to be had.

  • Daver

    they chose to make less, just so they would make more than their peers?  Seems like a lot of details that would make sense of this were left out.  I suppose behind it all is the idea that you'll be able to market yourself as someone who was paid twice the norm, rather than someone that was paid half.  This would be an important consideration to someone looking to use this as a way to leap frog a couple rungs on the ladder.  And only today's youth would believe they can leap frog a couple rungs on the ladder without actually paying their dues.

  • Tyler Fastcompany Gray

    "a lot of details ... left out." That's true. It's an excerpt. The book goes into much greater detail.