human resource

The Matthew Effect in monetary wisdom: corporate social responsibility, behavioral economics, love of money, and ethical decision-making

Thomas Li-Ping Tang1

Received: 2 May 2021 /Accepted: 28 May 2021/ # The Author(s), under exclusive licence to Springer Nature B.V. 2021

Abstract Robert King Merton’s article published in Science popularized the Matthew Effect: “For to everyone who has, more will be given and he will grow rich; but from the one who has not, even what he has will be taken away” (Matthew 25:29). The Matthew Effect prevails at the individual, organization-industry, and country-global levels. This interdisciplinary review connects the Holy Bible with agency theory, tournament theory, corporate social responsibility (CSR), prospect theory, behavioral economics, the psychology of money, and business ethics in the literature. I expand the Matthew Effect, incorporate prospect theory and the love of money (1 Timothy 6:9–10), and develop a multi-level theory of the Matthew Effect in Monetary Wisdoms: Individual decision-makers apply their deep-rooted values (avaricious monetary aspiration, the love of money attitude) as a lens, frame the critical concerns in the immediate and omnibus contexts, and maximize expected utility and ultimate serenity-happiness across people, context, and time at the individual, organization-industry, and country- global levels. The rich (with talents, integrity, character, and wisdom) serve God, enjoying the ultimate joy and happiness. The poor serve mammon, destroying their lives. The rich get richer. The poor get poorer. Scholars of business ethics and CSR must explore this phenomenon in future studies.

Keywords The Matthew Effect . Haves/have-nots . The rich/the poor . Serving God/ mammon . Management/spirituality/religion . Prospect/agency/tournament . Behavioral economics . Monetary wisdom/intelligence . Utility . Serenity/happiness/positive psychology.Meritocracy/egalitarianism.Corporatesocialresponsibility.Businessethics . Nobel Prize . Enron/corruption . Talents/possessions/money/time/equal opportunity/ justice . Accountability/responsibility/ROI . Creativity/imagination . Multi-level

Asian Journal of Business Ethics https://doi.org/10.1007/s13520-021-00126-x

* Thomas Li-Ping Tang [email protected]

1 Department of Management, Jennings A. Jones College of Business, Middle Tennessee State University, Murfreesboro, Tennessee 37132, USA

Introduction

The most significant purpose of this article is to develop the Matthew Effect in Monetary Wisdom. The Parable of the Talents inspires robust impacts on human behaviors at the individual, organization-industry, and country-global levels for centuries worldwide. Re- searchers have rarely acknowledged this profound phenomenon and its consequences on corporate social responsibility and business ethics.

Robert King Merton, who had a Ph.D. from Harvard University (1936), was the first and most famous scholar who popularized the Matthew Effect in a prestigious journal, Science (1968), entitled “The Matthew Effect in Science.” Scientists who won the Nobel Prizes have become more famous than those non-winners. There is a strong tendency to give credit to already renowned people. The Nobel Prize winners receive the lion’s share of recognition and become eminent. The “rich-get-richer” phenomenon has become synonymous with “the Matthew Effect” (Otner 2018). Merton (1948) also coined the term self-fulfilling prophecy (Eden 1990; Eden and Rynes 2003; Howard et al. 2015; Latham et al. 2010). The Matthew Effect is related to the fields of manage- ment, spirituality, religion (Tang 2010b), corporate social responsibility (CSR) (Barkemeyer 2009; Jamali and Mirshak 2007; Zhou et al. 2018), behavioral economics, financial dream (Tang et al. 2014), and business ethics (Jamali et al. 2020a, b; Tang et al. 2018a, b).12

Following the Matthew Effect in the Holy Bible, I briefly review the literature on the theories and practices of the Matthew Effect. Nobel Laureate Daniel Kahneman’s prospect theory examines individual decision-making under uncertainty in the gains-losses domain and high-low probability. Kahneman mentioned in his 2011 book, Thinking, Fast and Slow: “There may also be cultural differences in the attitude toward money” when explaining the endowment effect and behavioral economics (p. 298). Most researchers have ignored that ordinary citizens consciously or unconsciously apply their monetary values in making critical decisions.

In the Parable of the Talents, the master knew servants’ deep-rooted monetary attitudes well and entrusted possessions to them—to each according to his ability. The theory of planned behavior (Ajzen 1991) asserts: Attitudes predict behaviors. I incorporate the prospect theory and attitude toward money—the love of money (1 Timothy 6:10) and develop a multi-level theory of the Matthew Effect in Monetary Wisdom. I define the Matthew Effect in Monetary Wisdom below:

Individual decision-makers apply their deep-rooted personal values (avaricious monetary aspiration) as part of their cognitive executive functions. They adopt the lens, frame their critical concerns in the immediate and omnibus contexts, and maximize expected tangible utility and intangible ultimate serenity-fulfillment across people, context, and time at the individual, organization-industry and coun- try-global levels. The Matthew Effect in Monetary Wisdom is a multi-level theo- retical model. Following the self-fulfilling prophecy, individuals become a prophet who can fulfill their prophecy. The rich get richer. The poor get poorer. Following Nobel Laureate Richard H. Thaler (2015), this theory provides practical implica- tions, helps people make better and more ethical decisions, and nudges them to become healthier, happier, and wealthier than before.

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The Matthew Effect in the Holy Bible

What is the Matthew Effect? To appreciate its meaning, we must visit the Holy Bible, the Parable of the Talents (Matthew 25:14–30):

It will be as when a man who was going on a journey called in his servants and entrusted his possessions to them. To one he gave five talents; to another, two; to a third, one—to each according to his ability. Then he went away. Immediately the one who received five talents went and traded with them, and made another five. Likewise, the one who received two made another two. But the man who received one went off and dug a hole in the ground and buried his master’s money. After a long time the master of those servants came back and settled accounts with them. The one who had received five talents came forward bringing the additional five. He said, “Master, you gave me five talents. See, I have made five more.” His master said to him, “Well done, my good and faithful servant. Since you were faithful in small matters, I will give you great responsibilities. Come, share your master’s joy.” [Then] the one who had received two talents also came forward and said, “Master, you gave me two talents. See, I have made two more.” His master said to him, “well done, my good and faithful servant. Since you were faithful in small matters, I will give you great responsibilities. Come, share your master’s joy.” Then the one who had received the one talent came forward and said, “Master, I knew you were a demanding person, harvesting where you did not plant and gathering where you did not scatter; so out of fear I went off and buried your talent in the ground. Here it is back.” His master said to him in reply, “You wicked, lazy servant! So you knew that I harvest where I did not plant and gather where I did not scatter? Should you not then have put my money in the bank so that I could have got it back with interest on my return? Now then! Take the talent from him and give it to the one with ten. For to everyone who has, more will be given and he will grow rich; but from the one who has not, even what he has will be taken away. And throw this useless servant into the darkness outside, where there will be wailing and grinding of teeth”. (Matthew 25:14–30)

What are the meanings of possessions/talents?

I classify seven constructs of talent into two categories. I list them below: First, tangible possessions include:

(1) (a) capital/financial/monetary resources,

(b) natural resources (e.g., air, water, land, raw materials), (c) data/information, cultural/legal/infrastructural, technical/technological re-

sources, and (d) human resources—intellectual capital and social capital.

Second, intangible possessions include:

(2) equal opportunity/competition, (3) autonomy/freedom/power to manage their possessions,

The Matthew Effect in Monetary Wisdom.

(4) precious time (time is money), (5) cumulative advantage/accountability/responsibility for the return on investment

(ROI), (6) ability to expand the talents across people, context, and time, and apply them to

individual, organization-industry, and country-global levels, and (7) the wisdom that tangible resources are limited in every context, yet the application,

creativity, and imagination for using the tangible and intangible resources are limitless in any context.

What are the implications?

Ozer and Perc (2020) used a diagram to demonstrate the Matthew Effect. A tiny three-ring circle has diameters of 5, 4, and 3, representing talents (Level 1). Using a proportional growth, a one-factor increase (5×5 = 25) leads to Level 2 results with diameters of 25, 16, and 9. Similarly, a second-factor growth (25×25 = 625) yields tremendous Level 3 outcomes with diameters of 625, 256, and 81, respectively. The difference in value between 5 and 3 is minute (5 – 3 = 2) at Level 1. The difference in achievement between 625 and 81 is enormous (625 – 81 = 544) at Level 3. The difference in the ratio is relatively small at Level 1 (5/3 = 1.66) but much more robust at Level 3 (625/81 = 7.72).

Following the meanings of talents discussed above, I expand Ozer and Perc’s (2020) visual model and offer additional speculations regarding these three levels of the Matthew

Fig. 1 The Matthew Effect with Growth by a Factor in Three Circles. The circle on the left, Level 1-“M”, barely visible, has three rings with diameters 5, 4, and 3, respectively. The growth is proportional to the size by a factor equivalent to their current diameter. The second circle from the left, Level 2-“M2”, presents three rings with diameters of 25, 16, and 9 (5×5 =25). Similarly, the third circle on the right, Level 3-“(M2)2”, reveals three rings with diameters of 625, 256, and 81 (25×25 = 625). The ratio between 625 and 81 is “7.72” (625/81 = 7.72). When the master returned, the ratio between the good and faithful servant (10 talents = 5 + 5) and the wicked, lazy servant (1 talent) is “10” (The Holy Bible, Matthew 25:14–30). Source: Ozer, M., & Perc, M. (2020). Palgrave Communications, 6, Article number: 34 (2020)

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Effect below (Fig. 1).1 The letter “M” signals the Matthew Effect, showing three circles, Level l “M”, Level 2 “M2”, and Level 3 “(M2)2”.

First, at the individual level, servants with more talents can leverage their posses- sions, effort, and time efficiently and effectively and make significant contributions, moving from Level 1 to Levels 2 and 3. These differences represent within-subjects differences across individuals (Individual X is superior to Individual Y), contexts (Task A shows higher quality performance than Task B), and time (from Time 1 to Times 2 and 3). Second, individuals may expand their talents from the individual level, Level 1, to the higher levels—i.e., organization level, Level 2, and country and global level, Level 3. These changes signal possible between-subjects difference at the individual, organization, and country-global levels. However, talented servants can serve at all three levels over time: An ethical person becomes a moral leader in a family, an organization, a country, and the whole world. Third, considering ones’ career, individ- uals’ current contributions are of limited scope. However, individuals can make more substantial contributions to their lives, careers, and the world by applying their intel- lectual and social capital, expanding to several decades in their lifetime and many future generations. The three circles of the Matthew Effect represent individuals’ three career stages—present, lifetime, and the future.

Good and faithful servants take these possessions seriously. Servants have dominion over the fish of the sea, the birds of the air, and all the living things that move on the earth (Genesis 1:28). Expanding the Matthew Effect and CSR, modern-day servants (policy-makers) have dominion over sustainable financial, social, and environmental development at the individual, organization-industry, and country-global levels. This issue is related to business ethics, environment, and responsibility. We are all on the same boat, the planet earth. “Everyone” matters.

The Matthew Effect in scientific research2

Researchers have expanded the Matthew Effect to meritocracy (Castilla and Benard 2010; Hing et al. 2002; Perc 2014), equity, and justice (Colquitt et al. 2021; Greenberg 1993; Özbek et al. 2016). It applies to compensation (Fralich and Bitektine 2016; O’Reilly et al. 1988), economic psychology (Tang 1996; Tang 2020a, b; Tang 2000a, b; Tang et al. 2014), university reputation ranking, tuition, university CEOs’ pay (Tang 2000c, d; Tang et al. 2004), corporate social responsibility (Zhou et al. 2018), financial dreams (Tang et al. 2014), active labor market (Bonoli and Liechti 2018), management (Bothner et al. 2012; Bothner et al. 2011), reading-education (Stanovich 1986), soci- ology (Petersen et al. (2011), sports (Bothner et al. 2012), and both light and dark sides Charness et al. (2014). I summarize only a few selected studies next.

1 I would like to thank one anonymous reviewer for this excellent suggestion. Please note my discussion of this ratio (7.72) later in this article. 2 As of May 1, 2021, I used the term, the Matthew Effect, and identified 292 articles in the Scopus database.

The Matthew Effect in Monetary Wisdom.

The Matthew Effect at the individual level

On the bright side, scientists with early funding success are more likely to succeed, producing an increasing distinction and rift. Those winners are 2.5 times more likely to win a mid-career award than non-winners across gender and academic fields (Bol et al. 2018). The winners continue to participate. The non-winners, however, cease to compete in later competitions. The rich get richer.

On the dark side, after the announcement of the prestigious Howard Hughes Medical Institute appointments, other articles in the topically related areas (sharing the exact keywords) experience substantial declines in citation rates, creating adverse spillover effects. The non-winners become less famous than the winners (Reschke et al. 2018). The poor get poorer.

In short, empirical results support the Matthew Effect’s bright and the dark sides. The rich get richer. The poor get poorer.

van de Rijt et al. (2014) bestowed early success upon randomly selected recipients of a population in four domains (industries): financial gain (crowd- funding, website: kickstarter.com), endorsement (evaluation of new products, epinions.com), social status (rewarding editors of the encyclopedia website, wikipedia.org), and social support (signature campaigns for the social and political petition, change.org). Compared with the control group, those with randomly selected early success in money, quality ratings, awards, and endorsements produce significant improvements in subsequent success rates. However, initial success has limits in providing more robust subsequent success in social feedback, demonstrating the decreasing marginal returns to success. Since researchers randomly selected the rich, the rich got richer at first, and the Matthew Effect waned, consequently. There are two critical points—first, the contexts matter, and second, time matters.

In the reading-education field (Stanovich 1986), the frequency of exposure and teacher explanation for the target words enhances vocabulary learning. However, these interventions are insufficient to overcome the Matthew Effect (Penno et al. 2002). Children with a higher ability make more significant vocabulary gains than those with lower knowledge across all conditions. Based on 1,284 young adults, relevant prior educational background, current activity, and motivation are related to their general science achievement (Walberg and Tsai 1983). Those with more substantial previous educational experiences are more strongly motivated and more intensely engaged in current activities. The rich become more affluent and prosperous, cumulatively, over time.

Individuals who have higher performance than others in the early grades score much higher in the later performances. The cumulative advantage (gap) increases steadily with grade level. The Sesame Street television program benefits children’s overall average test scores. Contrary to the program goals, the gap in performance between middle-class children and the poor ones increases over time (Cook et al. 1975). Among 1,000 households, the ratio of maternal care embodied in preschool children of higher and lower socioeconomic status is about five to one (Hill and Stafford 1974). Disad- vantaged children are less likely to use childcare than more advantaged children (Pavolini and Van Lancker 2018). The former does not benefit from the stimulating contexts than the latter.

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Among 81,000 high school students, family background and individual differences predict educational attainment, annual income, and occupational prestige 11 years later (Damian et al. 2015). Unlike intelligence, personality traits help them compensate for background disadvantage to a small extent but do not lead to a “full catch-up” effect. Participants with little perceived workplace discrimination tend to endorse meritocracy and oppose a preferential treatment program (Hing et al. 2002). Affirmative action programs help disadvantaged minority groups. Park and Liu’s (2014) exploration regarding Asian Americans, meritocracy, and affirmative action suggests: It pays to be privileged (Friedman and Laurison 2019).

In 1978, the United States Supreme Court case (Regents of the University of California v Bakke) banned racial quotas in university admissions. In November 2020, California voters rejected racial preferences (Proposition 16) again. This large margin of defeat, 56 to 44%, reaffirmed California citizens’ long-standing preference for neutrality. There are more than 1 million international students enrolled in the US in the 2018–2019 academic school year. Among them, 42% come from China and 12.6% from India (Struck 2020). Friedersdorf (2020) stated:

Many Californians believe that treating people differently on the basis of their race, ethnicity, or national origin is wrong. Others have concerns about the validity or adequacy of existing racial and ethnic categories and the attendant complications of shaping decisions on their basis. If Proposition 16 had passed, California officials would have been forced to decide, for example, whether African American descendants of slaves should be treated the same as Nigerian immigrants, whether Hmong, Chinese, and Indian Americans, or Spaniards, Argentines, Peruvians, and Salvadorans, were in the same category, or whether Latinos, the state’s largest identity group, should benefit from preferences histor- ically reserved for minorities.

The Matthew Effect at the organization-industry level

Among 400,000 scientists, data from six high-impact journals (Nature, Science, the Proceedings of the National Academy of Science (PNAS), Physical Review Letters (PRL), New England Journal of Medicine (NEJM), and CELL) supported the Matthew Effect (Petersen et al. 2011). A given scientist’s career longevity reflects the duration between an author’s first and last paper in that journal. Scientific authors’ previous publications increased their reputation and facilitated career publication in a particular journal. With the growing publication in a specific journal, the inter-publication time decreases. Scientists’ career longevity is 9 years in Nature, PNAS, and Science and 11 years in CELL, NEJM, and PRL, respectively. In these two different (sub)industries, the rich publish faster and longer with a more extensive career than the poor.

Researchers analyzed 20,000 athletes’ sports careers in four distinct leagues/(sub)- industries: Major League Baseball (MLB), Korean Professional Baseball (KPB), the National Basketball Association (NBA), and the English Premier League (EPL). These four distinct leagues have varying indicators of success: “at bat” for batters, “inning

The Matthew Effect in Monetary Wisdom.

pitched in outs” in baseball, “minutes played” in basketball, and “games played” in soccer. Most athletes have a short time interval between their debut and finale. A significant disparity in career length exists, showing the “one-hit wonders” and the “iron horses.” Regarding the career longevity in sports, in baseball, the measure for batters at-bats (pitchers excluded) is 2,500 in Korea (KPB) and 5,000 in the USA (MLB), and pitcher’s inning pitched in outs (IPO) is 2,800 in Korea and 3,400 in the USA, revealing cross-cultural differences in the same industry.

In basketball (NBA), career longevity is 21,000 min played. For soccer players (EPL), the longevity measure is 140 games played. About 3% of baseball pitchers have a career length in the MLB of one inning pitched or less. For basketball players, roughly 3% have a career length in the NBA of less than 12 in-game minutes. Like the publishing industry, the rich get richer, play more, and stay longer across different sectors.

Who was the professional basketball player that played 15 seasons in the NBA, winning six championships? Michael Jordan was the Chicago Bulls’ third overall pick of the 1984 draft. During his rookie season, he averaged 28.2 ppg (points per game) on 51.5% shooting. Jordan scored a career-high 69 points on March 28, 1990 (117–113 road win over the Cavaliers). His career-high 33.4 ppg was the NBA record. His buzzer-beater, game-winning field goals decided 25 games. Michael Jordan, a global cultural icon, popularized the NBA around the world. Larry Bird said that he was “one of a kind” and comparable to Wayne Gretzky as an athlete. “I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. Twenty-six times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed,” said Michael Jordan. “You miss 100% of the shots you don’t take”, Wayne Gretzky stated. The rich take risks and get richer.

The Matthew Effect at the global level-CSR

For several centuries, citizens have enjoyed an unprecedented quality of life and subjective well-being. Yet, global economic growth has caused severe environmental damages, undermining the ecology’s sustainability and the human race’s survival. Current global warming occurs roughly ten times faster than the ice-age-recovery warming average (National Research Council (NRC) 2006). The rate of sea-level rise is accelerating slightly every year and is nearly double that of the last century (Nerem et al. 2018). Climate change, hurricanes, floods, droughts, wildfires, and earthquakes become more frequent and severe than before.

On September 25, 2015, the United Nations (UN) adopted 17 Sustainable Devel- opment Goals (SDGs). With all 193 member countries, people intended to end poverty, protect the planet, and ensure prosperity for all as part of a global “Agenda 2030” (United Nations 2015). In 2019, two MIT professors, Abhijit V. Banerjee and Esther Duflo, won the Nobel Prize in Economic Sciences. In their 2019 book, they stated: We often portrayed “China and India” “as the poster children for trade-fueled growth in GNP” (p. 55). As the world’s exporting powerhouse, China is “about to seize the position of the world’s biggest economy from the United States” (p. 55). However, can we “afford to continue at its current pollution levels” (p. 221)?

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Do business ethics scholars educate citizens at the individual, organization- industry, and country-global levels to manage abundantly available natural re- sources and sustainable environment for future generations (Barkemeyer 2009)? Or are we severely depleting and brutally damaging all resources and the natural environment? Are we good and faithful servants, or wicked, lazy servants? Do we satisfy all stakeholders? Human beings are much more powerful than all the living things on earth. These living creatures cannot take care of themselves. Some species have become extinct. Can these living creatures challenge individuals (fishermen and consumers), corporations (fishing industries), various industries, and countries in court and wait for compensatory and punitive damages? Are we behaving ethically and responsible for our actions’ consequences? Is it fair? Is it ethical (Tang 2010a, b)? Do large corporations consider CSR (Orlitzky et al. 2003; Zhou et al. 2018)? What is our score on the balanced scorecard or the triple bottom line (economic, social, and environmental performance at the individual, organization-industry, and country-global levels)? Do policy-makers consider profits, people, and the planet in their decisions?

Globalization has created a large and growing middle class. With time and money, most citizens enjoy travelling and tourism. The tourism industry encompasses hospi- tality, transportation, food and beverage, retail, culture, sports, recreation, and enter- tainment venues, serving domestic, international, business, and leisure visitors. This tourism industry creates 20% of the global net job growth, 10.4% of the 2018 global GDP, and supports 319 million jobs, contributing to 10% worldwide employment (Travel & Tourism, 2019). However, over-tourism has profoundly impacted environ- mental sustainability (Font and Hindley 2017).

The yearly annual tourist arrival to resident ratio for the top destinations worldwide was 16.3 in Venice, Italy (2014). Other attractions’ ratios included 11.5 in Amsterdam, the Netherlands, 9.8 in Florence, Italy, 7.0 in Paris, France, and 7.4 in New York City, the USA (2017), creating challenging implications (Oklevik et al. 2019).

Venice has many talents. Venices’ natural beauty, geographic location (more than 100 small islands in a lagoon in the Adriatic Sea), rich history (Renaissance and Gothic palaces—Piazza San Marco, Basilica De San Marco), culture (canals, gondolas, houses with bright colors/red roofs), delicious Italian cuisines (sarde in saor, baccala mantecato, risi e bisi, bigoli in salsa, risotto, mołéche), artistic specialty products (Murano Glass), and friendly people help Venice become one of the most famous global tourist attractions. However, the rich are vulnerable to over-tourism and envi- ronmental stress. The rich must do more to stay sustainable.

Due to its large population (1.4 billion) in China, one tourist attraction at Miao-Dong Autonomous Prefecture stretched this ratio to 26.5 times the residents Hu et al. (2021). According to a Chinese restaurant owner in the USA, customers consumed 800 pounds of shrimps on one good weekend in 2019. The success of one tourist attraction and even one restaurant may have created a profound carbon footprint in the industry.

In a communist society and limited exposure to the Western religions, religious people in China have hope and practice HOPE (Help Ourselves Protect the Environ- ment) (Mo et al. 2021). Taoism and Buddhism impact HOPE at the individual level. Dogma and systematic ritual inspire sustainable HOPE. Religions help people preserve the environment and save the earth.

The Matthew Effect in Monetary Wisdom.

Agency theory

Economics is the scientific study of the ownership, use, and exchange of scarce resources. Today, the master is the principal or owner of the Multinational Corporation (MNC)-industry. The servants are agents—CEOs, managers, and employees (Eisenhardt 1989). Agency theory attempts to determine the most efficient way of governing the principal-agent relationship. Servants displayed different risk-seeking or risk-aversion orientations across the organizational echelons.

The lazy and wicked servant stated: “I knew you were a demanding person, harvesting where you did not plant and gathering where you did not scatter; so out of fear3 I went off and buried your talent in the ground.” That servant correctly explained the relationships between the master-principal and the servants-agents. The principal (master) monitors the agents (servants). The agents are responsible for making profits. The directors monitor and assess the extent to which the principal and agents’ interests are in proper alignment (Gilbert and Tang 1998). The principal favors a focused corporate strategy to maximize shareholder value, whereas the agent prefers diversification to reduce risks. Both agency theory and tournament theory reveal the intricate relationships between agents and masters (lords, multiple-stakeholders) at the individual, organization-industry, and country-global levels. Both theories serve as the two sides of the same coin.

A study of the publicly traded hotels in Taiwan shows an inverted U-shaped relationship between board size and hotel performance (Wang et al. 2018). A positive relationship prevails when the board size is smaller than 10, supporting the resource dependence theory. In contrast, a negative relationship exists when the board size is larger than 10, helping the agency theory prevail due to diversification and reduced risks.

Using data from UK Financial Times and Stock Exchange (FTSE) for 5 years (2010–2014), Elsayed and Elbardan (2018) explored the mutual association of execu- tive compensation and firm performance of 350 companies after controlling for board size, non-executive directors, leverage, and boardroom ownership. The total compen- sation for CEOs and boardroom members has a more substantial influence on firm performance—supporting the tournament theory. A 4% overall compensation increase of CEOs and boardroom executives results in a 100% increase in firm performance. Large boards pay their executives significantly more than small boards. Many non- executive directors will improve board independence, active monitoring functions, and performance-related compensation decisions. Large boards motivate lower-level exec- utives to compete and move up, supporting the tournament theory.

In the Netherlands, the top 10% of Dutch households owned 61% of the country’s net wealth in 2014 at the country level. Sahib et al. (2018) tested tournament theory, investigating the CEO-TMT (top management team) pay disparity and firm perfor- mance using the Amsterdam Stock Exchange and the annual reports of these 107 firms for 5 years (2002–2006). They disaggregated the corporations’ growth into organic and

3 According to Harvard Business School Professor Teresa Amabile: When creativity is under the gun, it usually ends up getting killed. In the Parable of the Talents, the reality is the same for all three servants, yet their perceptions or attitudes differ, leading to various behaviors and consequences. Attitudes predict behaviors.

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acquisition growth and executive compensation into salary, bonus, and stock options. Organic growth reflects expansions of current existing business units. For acquisition growth, firms “buy” size through acquisitions (p. 2041). The acquisitive growth has a much more powerful impact on CEO-TMT pay disparity for all components (total pay, salary, and bonus) except stock options than organic growth.

CEOs benefit from a higher number of acquisitions, lengthy deals, and better firm performance, receiving the lion’s share of the gain. TMT members do not benefit from acquisitions. Larger boards contribute to both CEOs and TMT members’ profits but do not affect CEO-TMT pay disparity. Firms with higher CEO turnover pay CEOs more and TMT members less. CEOs face higher risks than TMT. Organizations replaced 47% of CEOs who engage in acquisitions within 5 years (Lehn and Zhao 2006). With acquisition failure, the rates for replacing CEOs went up. The average CEO total compensation was about €1,170,000, whereas the average TMT was €970,462 (The CEO-TMT pay differential = 1.21). CEO-TMT pay disparity incentivizes TMT con- testants to win the championship—becoming the CEO.

Unlike the USA and UK, but similar to Germany, the composition of boards in the Netherlands’ large corporations requires substantial labor representation on the board, up to one-third of the board, deterring excessive pay differentials. The turnover rate among vice presidents is higher in a steep tournament structure in the USA (Kale et al. 2014).

Pay dispersion using a 10-year longitudinal data of publicly traded firms in multiple industries suggested that transient institutional investors (short time horizons and equity stakes in various firms) positively influence pay dispersion. Dedicated institutional investors (longer investment time horizons and equity stakes in fewer firms) negatively affect pay dispersion. Pay dispersion harms long-term performance. Top managers gain rewards for their product diversification and high performance disproportionately. Pay dispersion yields short-term benefits with negative long-term repercussions.

Tournament theory

Tournament theory at the individual-organization levels

The master gave his possessions to his three servants: 5 talents, 2 talents, and 1 talent, respectively, representing the Matthew Effect at the individual level. The master intentionally revealed the pay disparity, signaling a tournament theory at the organi- zation-industry level. Talents of 5, 2, and 1 represent an ordinal scale with unequal distances between two classes. This clearly defines the first place (championship) (5), second place (2), and third place (1) in a tournament. The ratio between 5 and 2 is 2.50. The ratio between 5 and 1 is 5. The ratio between 2 and 1 is 2.

Steep corporate tournaments in tall organizations attract bright and talented contes- tants to compete at the organization-industry level. Talented competitors move to the top of the hierarchy, bear the most significant risks, and reap the most considerable rewards, creating a significant pay differential between two adjacent levels. Top performers enjoy high compensation, frequent promotions, and senior leadership positions—reflecting meritocracy at the corporate-industry level. CEO-TMT pay dis- parity demonstrates the alignment of corporate vision with competitive compensation

The Matthew Effect in Monetary Wisdom.

strategies. The size of “the prize spread” ensures the continued stimulation of high effort. This pay disparity tends to increase slightly over time but remains relatively stable (Tang et al. 1998). The tournament creates a large gap between the CEO (the first place) and TMT (the second place), motivates TMT contestants to compete for promotion/pay within organizations, between organizations, or across different indus- tries (Tang et al. 2000b). Compared to egalitarianism (equality), tournament theory favors equity or meritocracy.

Tournament theory at the country level

In the USA, the Social Security Administration data in 2017 presented the income levels of the top 1%, 5%, and 10% (from 90 to 99%, without the top 1%) (Kagan 2018). The average wage earnings were:

(1) Top 1%: $718,766, (2) Top 5%: $299,810, (3) Top 10%: $152,476, (4) Overall average: $53,474, and (5) Bottom 90%: $37,064

The top 10% made 39.1%, bottom 90% earned 60.9%. The ratio between the top 1% and 5% was 2.40 ($718,766/$299,810; comparable to the Matthew Effect: 5-talents/2- talents = 2.50). The ratio between the top 5% and 10% was 1.97 ($299,810/$152,476; close to 2-talents/1-talent = 2.00). The ratio between the top 1% and top 10% was 4.71 (close to 5-talents/1-talent = 5.00). The ratio between the top 1% and the average was 13.44 ($718,766/$53,474). The ratio between the top 1% and the bottom 90% was 19.39.

Following the Social Security Administration 2017 data, the ratio between “the top 1%” and “the average” was 13.44 ($718,766/$53,474 = 13.44). This ratio, 13.44, is close to the ratio mentioned in the Holy Bible, the Matthew Effect. At the end of the Parable of the Talents, the three servants have 10 talents, 4 talents, and 1 talent, respectively. The ratio is 10 (10/1 = 10). Please recall the master’s decision: “Take the talent from him and give it to the one with ten.” Therefore, after the master’s final order, the three servants have 11, 4, and 0 talents (the ratio is “11” to “0”).

The ratio 13.44 in my calculation was more robust than Ozer and Perc’s 7.72 (625/ 81; see Fig. 1). The ratio between the above two was 1.74 (13.44/7.72). The reality in the USA was 1.74 times more unforgiving than Ozer and Perc’s (2020) illustrations and the Bible (11 to 0). There are two robust observations. First, these ratios in the USA (“the top 1%” vs. “the average”) corresponded reasonably well to that of the Holy Bible’s three servants. Second, there is reasonable consistency over time between (1) the ratios in 2017 and (2) the ratios in Jesus’s biblical time, supporting the Matthew Effect. The potential change of this ratio remains to be seen in the USA and around the world. The Matthew Effect may vary across regional differences in the USA.

According to Title 3 of the US Code, the American Presidents shall earn a salary of $400,000, along with a $50,000 annual expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment. The total amount is $569,000. This income puts the American President (at the individual level) at the top 5% category (at the

Tang T.L.-P.

country level). For a retired president, the pension was $207,800 per year in 2017. President Barack Obama’s estimated net worth is around $40 million. President Donald Trump’s estimated net worth is about $3.1 Billion.

Following the Matthew Effect, Donald Trump jumped from his real-estate industry to become the first billionaire president of the USA. According to a recent USA Today report (Stellino 2020), President Donald Trump “works for no money and donates the entirety of his presidential salary.” “Trump has written checks equal to a quarter of his $400,000 annual salary every quarter to various agencies”. In US history, Presidents Herbert Hoover, John F. Kennedy, and Donald J. Trump donated all their presidential salaries.

Tournament theory at the global level-CSR

Globalization eliminates barriers to international movements of goods, services, capital, technology, and people. Since the first century BC, the Silk Road has connected the East and West. People have engaged in international trade. Highland Silk Road networks emerged slowly concerning nomadic herders’ long-established mobility patterns in inner Asia mountains (Frachetti et al. 2017).

In recent decades, globalization has increased its pace. The World Trade Organization, the European Union, Free Trade Agreement, common currency, customs union, and common market facilitate human resource movements. “Poor people often live very vulnerable lives. Their incomes tend to be volatile and their health precarious” (Banerjee and Duflo 2019, p. 35). Although comfort and connections offer attraction yet, most “follow the opportunities wherever they might be” (Banerjee and Duflo 2019, p. 42). In the USA, “high-skilled workers continue to move from poor states to rich states” (p. 43). Since the grass is greener on the other side of the border, immigrants take risks and immigrate to rich countries, taking “a shot at striking it rich” (p. 42).

About 1.4 million a year, non-EU asylum seekers and refugees, mostly Muslims from the Middle East and Africa, immigrated across the Mediterranean Sea or overland through Southeast Europe to the EU between 2010 and 2013. It created the European migrant (refugee) crisis. Immigration worries drove the Brexit vote. The UK wanted to take back control of its money, laws, and immigration (Adam and Booth 2018). “With echoes of Brexit, Swiss set to vote on immigration” (Reuters 2020). It takes time for them to assimilate the language, culture, upgrade new skills, become valuable em- ployees, and contribute as citizens in a new country.

The quickest and most assured route to obtaining citizenship of a European country, in Cyprus, an island country, is to invest €2.0 million in real estate and donate €100,000 to the Governments Research and Development fund and €100,000 the Land Devel- opment Organization. The process takes only 6 months. Cyprus people enjoy the lowest crime rate in Europe and the world’s 5th safest country with a favorable tax regime. EU citizenship grants the freedom to work, travel, study, and live anywhere within the EU. For the past 10 years, Cyprus has issued more than 3,000 passports to foreign investors. Ireland (€2.0 million), Portugal (€350,000 plus Real Estate invest- ment), and Greece (€250,000) offer residency programs with lower investment criteria. The rich (foreign investors) buy citizenship and freedom in the EU.

The Matthew Effect in Monetary Wisdom.

Selected empirical studies on tournament theory

“The firm would always like to increase the spread, ceteris paribus, to induce greater investment and higher productivity” (Lazear and Bosen 1981, p. 844). When the prize for winning the championship is much higher than the second place, the score will be better in the tournament (Connelly et al. 2014; Gerhart and Newman 2020). Results based on Major League Baseball (MLB, 1985–2013) showed that more significant wage disparity is negatively associated with team performance (Tao et al. 2016). Researchers treated the payroll level (the absolute level) and the payroll’s relative position (the ratio of team payroll to current MLB team payroll) as control variables and offered new insights. Salary dispersion’s negative impact on team performance is significant in the former but non-significant in the latter. Results support the equity pay theory and team-cohesiveness hypothesis: Greater wage disparity is negatively related to team performance. Teams with few superstar players with tremendously high salaries are not likely to win more games than those with a higher number of talented players. A team’s payroll ranking in MLB is more robust in explaining the results than pay dispersion.

Using “within-person” design in a field study, Beus and Whitman (2017) explored the effect of the salience of money on both self-serving behaviors and cooperative behaviors over time. Professional athletes significantly increase their self-serving actions (scoring more points) in the final contract year (with height- ened monetary prominence) relative to surrounding years. Still, they do not adversely affect cooperative actions and team success. This pattern exists in two different professional athletes—the National Basketball Association (NBA) and the National Hockey League (NHL). It explains MLB players’ team performance (Tao et al. 2016).

Bothner et al. (2011) applied data from the Professional Golf Association (PGA) and the National Association for Stock Car Auto Racing (NASCAR). A curvilinear effect exists. Athletes’ performance improves with status; however, after reaching a high- class level, performance wanes. As one of the greatest golfers in history, Tiger Woods won the Masters tournament in 1997, 2001, 2002, 2005, and 2019. He has the second- most PGA Tour wins among all golfers, with 81 wins, a sign of the Matthew Effect, behind Sam Sneed with 82.

After winning the Oscars, actors appear in more movies in the entertainment industry than Oscar nominees (Jensen and Kim 2015). Both male and female Oscar winners and Oscar nominees appear in more films and experience less of a decline in appearances than other actors throughout their remaining careers. However, the “Oscar curse” exists in their personal lives. The divorce rates of Oscar winners and nominees increase for males but not for females. Male Oscar winners and nominees have a higher rate of divorce than non-nominees. Female Oscar winners and nominees enhance their appearances in films. With great movie appearances, their divorce rate also increases, and with a divorced status, their film appearances also improve. When parents were actors, both males and females increase the likelihood of divorce. Male action heroes are more likely to divorce than those non-action actors. Marrying to Oscar winners or Oscar nominees increases male actors’ rate of divorce. Overall, male actors suffer the most harmful consequences of Oscar nominations and wins. Winning the tournament has its dark side.

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Other management theories

Urgency

The three servants reflect McGregor’s (1960) assumptions of Theory X and Theory Y and a distinct sense of urgency. Harvard Business School professor John Kotter (2008) defined a sense of urgency as a combination of thoughts, feelings, and actual behavior. The servants faced risks in managing talents because it was not a 100% sure thing to gain additional talents or make money (prospect theory’s possibility effect). The servant with 5 talents took action immediately and made another 5. Following prospect theory, this servant’s risk-taking orientation prompted him to take risks in the context of uncertainty and low probability. Yet the servant with 1 talent did nothing, exhibiting a sense of complacency, or risk-aversion, in the same context. It appeared that the servant “worked for pay” (John 10:12–13), as a hired man (agent), had no concern for the organization, and took no action (Theory X).

The good and faithful servant’s success was due to his faith and good works during the master’s absence. Success is not an accident. Many strongest performers did not have stratospheric IQ scores, but they had grit—passion, and perseverance (Duckworth and Quinn 2009; Yeager et al. 2016). With passion and determination, grit is a significant predictor of success.4 We must live a life like a marathon, not a sprint. Grit predicts educational attainment and fewer career changes among adults, high GPA and fewer hours watching television among adolescents, retention of cadets at the United States Military Academy, West Point, and the achievement of the final round status in Scripps National Spelling Bee competition. These notions expand Max Weber’s (1905) construct of the work ethic.

Time is money

The servants have dominion over their seven tangible and intangible possessions—their input, discussed earlier. “Then he went away.” Servants were unknowingly in an open tournament without deadlines or supervision. The master tested servants’ time man- agement skills and intrinsic motivation and measured their output (Tang and Baumeister 1984). Time is the scarcest resource and more precious than money (Leclerc et al. 1995; Payne et al. 1996; Devoe and Pfeffer 2007). You can trade with money but cannot barter with time.

Why is 168 a lucky number? This number, 168, is related to success and prosperity. Time is money and is the ultimate equal opportunity. It was true in ancient times, and today’s materialistic societies, indeed, with a much profound business mentality and market mindset: We all have 24 hours a day and 7 days a week. Each day, individuals are up for 16 hours and sleep for 8 hours. We obtain the number 168 by simply putting 16 hours and 8 hours together (168). When we add these two numbers together, the result reflects the total number of hours in a day (16 + 8 = 24). Amazingly, by

4 The Matthew Effects is strongly related to faith and good works. “See how a person is justified by works and not faith alone” (James 2:24). “Immediately the one who received five talents went and traded with them, and made another five” (Matthew 25:15–16). This verse reflects the servant’s good works. Individuals’ ability (talents, can do), motivation (good works, will do), and opportunity (equal opportunity in the context, time) define performance.

The Matthew Effect in Monetary Wisdom.

managing the 24 hours effectively every day for 7 days, we have dominion over the 168 hours in a week (24 × 7 = 168). With excellent time management skills, one may enjoy great success and prosperity in one’s life. “Tell them to do good, to be rich in good works, to be generous, ready to share, thus accumulating as treasure a good foundation for the future, so as to win the life that is true life” (1 Timothy 6:18–19). “Wealth quickly gotten dwindles away, but amassed little by little, it grows” (Proverbs 13:11). The master went away and granted all three servants their freedom and the equal opportunity to manage their possessions.

The Matthew Effect in monetary wisdom

God and mammon

Surprisingly, more than half of the Bible’s parables have something to do with money, possessions, and the management of money (Chen and Tang 2013; Tang and Chen 2008). Jesus talked about money more than anything else except the Kingdom of God. It shows the importance of money and the Matthew Effect. When pitting the Kingdom of God against the Matthew Effect, money, the Bible reveals: “No one can serve two masters. You cannot serve God and mammon” (Matthew 6:24). Serving God, having faith, doing the good works, and practicing business ethics lead to life. “Do to others whatever you would have them do to you” (Matthew 7:12). However, serving mam- mon leads to destruction or death. Judas Iscariot, the treasurer, CFO, betrayed Jesus for 30 pieces of silver.5 Scholars have overlooked the attitude toward money, a proactive construct, as a novel lens to frame the Matthew Effect. This article fills the void.

Daniel Kahneman’s (2011) prospect theory frames judgment under uncertainty using the gains-losses domain and high-low probability. It proposed the fourfold pattern of preferences—risk-aversion in the field of gains, risk-seeking in the realm of losses under a high probability context (the certainty effect); risk-seeking in the domain of gains, and risk-aversion in the region of losses under a low probability context (the possibility effect). Kahneman stated: “There may also be cultural differ- ences in the attitude toward money” when explaining the endowment effect and behavioral economics (2011, p. 298). Following Kahneman’s inspiration, I incorporate the attitude toward money and prospect theory to expand the Matthew Effect in Monetary Wisdom. Individuals consciously or unconsciously apply their deep-rooted values (the love of money-avaricious monetary aspiration) as part of their executive cognitive functions. They frame the critical concerns in the proximal (immediate) and distal (omnibus) contexts to maximize expected utility and ultimate happiness (Tang 2016, 2020a, b; Tang et al. 2018b).

5 “He was a thief and held the money bag and used to steal the contributions” (John 12:6). “Then, one of the twelve, who was called Judas Iscariot, went to the chief priests and said, “What are you willing to give me if I hand him over to you?” They paid him thirty pieces of silver” (Matthew 26:14–15). Did Judas apply his deep- rooted monetary values—the love of money—to frame the betrayal of Jesus and negotiate thirty pieces of silver to maximize his expected utility? This story in the Bible reflects the dark side of the Matthew Effect in Monetary Wisdom.

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The meaning of money

Following the ABC (affective-behavioral-cognitive) model of attitudes, researchers investigated the meaning of money (Furnham 1984, 2014; Tang et al. 2018a, b; Zelizer 1989; Zhou et al. 2009). Mitchell and Mickel (1999) considered the Money Ethic Scale (MES, Tang 1992) as one of the most well-developed and often used money attitude measures in the literature. Scholars have substantiated this money construct (MES) and the love of money (Tang and Chiu 2003) across 45 countries in six continents worldwide. Authors have cited the construct in textbooks of compensation, organiza- tion behavior, human resource management (Colquitt, LePine, & Wesson, 2021; Gerhart and Newman 2020; McShane and Von Glinow 2021; Phillips 2022), and the news media (Bloomberg 2016; CNN: Gillespie 2016; Financial Times: Authers 2016) (Tang 2020a).

The 4-factor, 12-item Love-of-Money construct consists of Factors Rich, Motivator, Importance-Good, and Power (Tang et al. 2018a): Most people want to be Rich. Money is a Motivator. Money is Important-Good. Money is Power (Lemrová et al. 2014). Besides the 4-factor Love-of-Money Scale, some scholars have used the first three factors. The psychological meaning of money is neutral (Tang 1992). “The love of money is the root of all evils” (1 Timothy 6:9–10). To avoid negative connotations, scholars may adopt a neutral term, avaricious monetary aspiration.

High avaricious individuals have high risk-taking behaviors and risk tolerance in the financial domain (Jia et al. 2013; Tang and Chen 2008, 2008a). The love of money results in objectification, reducing intimacy (Wang and Krumhuber 2017). High love- of-money males favor significant pay disparity, supporting the Matthew Effect and tournament theory (Tang 1996; Tang et al. 2000a, b, c, d). Those with individualistic values appreciate meritocracy, equity, or the Matthew effect. In the USA, high love-of- money employees have high incomes and high turnover intentions. Their high love-of- money attitude predicts actual voluntary turnover 18 months later Tang et al. (2000b). Avaricious individuals are proactive and very sensitive to the external environment. Collectivist, socialist, and communist cultures value egalitarianism. In socialist/ communist countries, most people have no motivation to work. In China, employees take turns to receive merit pay. The rich buy citizenship in EU countries. In the Parable of the Talents, after receiving the talents, these three servants behave differently. This paragraph summarizes servants’ differences—their attitude toward money and subse- quent actions.

As of May 24, 2021, I searched “monetary intelligence” and identified 11 articles in Scopus database (Chen et al. 2014; Gentina and Tang 2018; Gentina et al. 2020; Gentina et al. 2018; Lemrová et al. 2014; Sardžoska and Tang 2015; N. Tang et al. 2018; Tang 2016; Tang and Sutarso, 2013; Tang et al. 2018a, 2018b). Using the term “monetary wisdom,” I found two existing articles (Gentina et al. 2020; N. Tang et al. 2018). Researchers include published articles (Tang and Chen 2008; Tang and Liu 2012; Tang et al. 2006, 2008a, b) and presentations (e.g., N. Tang et al. 2019; Tang et al. 2011; Tang et al. 2019). Among these 20 articles, monetary intelligence and wisdom are associated with the “dark” and “bright” sides, respectively. Due to space limitations, I will briefly summarize selected papers.

The Matthew Effect in Monetary Wisdom.

The dark side of the Matthew Effect

The tournament theory excited Enron executives to set up “a trap”6 to reward long-term shareholder value. Their mark-to-market accounting trumped stock prices. Fortune mistakenly named Enron “America’s Most Innovative Company.” Jeffrey Skilling (MBA from Harvard Business School) received 132 million. TMT’s top five execu- tives received 282.7 million (56.54 million/person). The CEO-TMT pay disparity ratio was 2.33 (5-talents/2-talents = 2.50). In 2001, Enron filed for Chapter 11 bankruptcy. Corruption caused the fall of Enron and Arthur Andersen and the loss of 110,000 jobs worldwide. Sadly, Kenneth Lay, founder and former CEO of Enron, died of a heart attack before sentencing. CEO Jeffrey Skilling was in jail for 14 years. CFO Andrew Fastow served a 4-year sentence7. The master threw the wicked servant “into the darkness outside, where there will be wailing and grinding of teeth” (Matthew 25:30).8 Did the benefits of corruption outweigh the cost? Serving mammon, not God, led them to the dark side of the Matthew Effect.The love of money (not money or income) caused them to become corrupt (Bliss and DiTella 1997; Fisman and Miguel 2007; Tang and Chiu 2003; Tang et al. 2018b; Tang et al. 2019a, b). Thus, “from the one who has not (character, integrity, and wisdom), even what they have (freedom, honor, reputation, and success, Gomez-Mejia et al. 2005) will be taken away”. The poor get poorer.129 The love of money is more potent than the theory of mind (ToM) in promoting unethical consumer beliefs (Gentina and Tang 2018). Among French adolescents, increasing work experience and age caused them to become unethical.

In a cross-level study, 6,382 managers (Level 1) were nested in 31 geopolitical entities (Level 2) across six continents. Tang et al. (2018b) explored the avaricious monetary aspiration (the love-of-money attitude) and framed corruption (dishonesty) in the proximal context of corporate ethical values (CEV, Level 1) at the company level and the omnibus context of Transparency International’s Corruption Perceptions Index (CPI, Level 2) at the country level. Managers in the high CEV and high CPI contexts are more likely to follow the ethical social norms at the organization and country levels

6 “Those who want to be rich are falling into temptation and into a trap and into many foolish and harmful desires, which plunge them into ruin and destruction. For the love of money is the root of all evils, and some people in their desire for it have strayed from the faith and have pierced themselves with many pains” (1 Timothy, 9–10). 7 Judas was the treasurer, CFO, of Jesus’ not-for-profit ministry in the Gospels. Andrew Fastow was the former CFO of Enron. Besides, Nissan’s board gave power/authority to former CEO, Carlos Ghosn (a Brazilian-born with French and Lebanese nationality), to set executive compensation, including his own. Ghosn’s financial fraud (misreporting income to financial regulators in Japan and using company funds for personal use, involving up to $140 million paid/unpaid income/retirement benefits) forced him to step down as CEO of Nissan and chairman of the Renault-Nissan-Mitsubishi Alliance. Greg Kelly was the former CFO and co-conspirator. Following the Parable of the Talents, the master entrusted his possessions to his servants. The presence of abundant wealth, or seeing green-cash, excites one’s envy and greed. The love of money is the root of all evils. 8 Jesus said to his disciples: “I am the true vine and my Father is the vine grower. He takes away every branch in me that does not bear fruit, and everyone that does he prunes so that it bears more fruit” (John 15:2). The rich get richer. 9 In 2019, the median household income was USD$63,688, according to the US Census Bureau. With a 50- year work life, this overly simplified calculation suggests that it takes 2072.60 years, or 41.45 lifetimes, for the median income person to make $132 million in 2019. ($132,000,000/year)/($63,688.00/year) = 2072.60 years; 1 career = 50 years, 2089.30/50 = 41.45 lifetimes. They served mammon.

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and behave ethically than those in low EV and low CPI entities. Empirical results demonstrate that managers display low, medium, and high corruption in good (high CEV/high CPI), mixed (high CEV/low CPI, or low CEV/high CPI), and bad barrels (low CEV/low CPI), respectively (Fig. 2). Cross-level results reveal that with low corporate ethical values, corruption’s intensity is the highest in top CPI entities (risk- seeking in the high probability context). In low CPI entities, corruption’s magnitude is the highest, but the intensity is the lowest (risk aversion in the low probability context).

With 6,500 managers (Level 1) nested in 32 political entities (Level 2) across six continents, a cross-level study provided novel insights regarding dishonesty across three levels of the global economic pyramid (Tang et al., 2019). With pay dissatisfac- tion, high love-of-money managers demonstrate justice-seeking dishonesty (Level 1) at the top and middle of the global economic pyramid (Level 2), revealing risk-taking in the domain of losses—the certainty effect. With pay satisfaction, avaricious managers show opportunity-seizing dishonesty at the base of the global economic pyramid (Level 2), demonstrating risk-seeking in the domain of gains—the possibility effect (Tang et al. 2011; Tang et al. 2019, b). The love of money is more robust than pay satisfaction/dissatisfaction in exciting dishonesty across different levels of the CPI.

The bright side of the Matthew Effect

Based on 6,586 managers in 32 entities, a formative model of monetary wisdom/ intelligence suggests the following novel discoveries. Low love-of-money motive (−.60), vital stewardship behaviors (.79), and moderate cognition (.19) contribute to monetary wisdom. Monetary wisdom is significantly related to higher life satisfaction

1.25

1.35

1.45

1.55

1.65

1.75

Low Love of Money High Love of Money

D is

ho ne

st y

(1) High Corporate Ethical Values, High CPI Index

(2) High Corporate Ethical Values, Low CPI Index

(3) Low Corporate Ethical Values, High CPI Index

(4) Low Corporate Ethical Values, Low CPI Index

Fig. 2 The love of money, corporate ethical values, and Corruption Perceptions Index (CPI) on dishonesty among 6,382 managers in 31 countries. Source: Tang, T.L.P. et al. (2018b). Journal of Business Ethics, 148, 919-937

The Matthew Effect in Monetary Wisdom.

than pay satisfaction (Tang et al. 2018a; Fig. 3). Please note that standardized income at the country level (Z income) is associated with pay satisfaction and life satisfaction. However, GDP per capita is only related to life satisfaction, but not pay satisfaction. Interestingly, neither Z income nor GDP per capita is significantly associated with Factor Happiness: Money makes people happy.

Most people want to achieve life satisfaction and pay satisfaction. Managers must curb their love-of-money motive (Rich, Motivator, and Important), become good stewards of our money (Make, Budget, Donate, and Contribute), and put the meaning of money in the proper perspective (Happiness, Respect, Achievement, and Power). Spending money on others promotes happiness (Dunn et al. 2008). Based on managers in 32 countries across six continents, these empirical findings support the notion in the

Fig. 3 A formative model of the love of money, pay satisfaction, and life satisfaction among 6,586 managers in 32 countries across six continents. Source: Tang, T.L.P. et al. (2018a). Journal of Business Ethics, 148, 893- 917

Tang T.L.-P.

Holy Bible: “Let your life be free from love of money but be content with what you have” (Hebrews 13:5). Among 1,011 Spanish citizens, high materialism leads to low financial satisfaction. Good stewardship of money helps citizens reach their financial goals, suppress materialism’s negative impact on financial satisfaction, and enjoy the bright side of their financial dream—the Matthew Effect (Tang et al. 2014).

Researchers treated 229 investors’ love-of-money attitude (Rich, Motivator, and Important-Good) and demographic variables as Level 2 variables. They treated daily repeated measures of Index Happiness, Stock Happiness, and portfolio changes for 30 consecutive trading days during the financial crisis in 2008 as Level 1 variables (N. Tang et al. 2018). A close examination of the extreme Index Volatility (the sharpest loss followed by gain and the sharpest gain followed by loss) in the boom-and-bust cycles showed intra-personal changes of stock happiness demonstrate investor monetary wisdom. Behavior- ally, investors must become “masters of money” but not “slaves to money.” Investors must deactivate money as a Motivator, curb the desire to become Rich to enhance stock happiness after gains. Appreciating money’s Importance bestows happiness after losses. “Closely following daily fluctuations is a losing proposition, because the pain of the frequent small losses exceeds the pleasure of the equally frequent small gains” (Kahneman 2011, p. 339). Data from 227 investors in four regions of China (city vs. country) (Level 2), their daily index happiness, and stock happiness for 36 consecutive trading days (Level 1) suggested that low aspiration, external control, and country investors enjoy the highest and sustainable stock happiness. Behaviorally, less is more (N. Tang et al. 2019).

Talent management strategy (TMS) consists of employees training and development in organizations. Based on 512 sales employees, TMS effectively reduces burnout (cynicism and inefficacy), improving their physical and psychological health in the proximal context, and increases job and life satisfaction in the distal context at the individual level (Srivastava and Tang 2021, Fig. 4). Life satisfaction, not job satisfac- tion, mediates the relationship between the talent management strategy and sales commission. Commission reflects income at the personal level and financial health at the organization level.

Interestingly, the relationships between job satisfaction and life are significant for the whole sample and the male sample, but not the female sample. Life satisfaction does not mediate the relationship between TMS and the sales commission for the female sample. Thus, the Matthew Effect prevails for the whole sample and males only but fails to exist for females.10 The small sample size and the lack of job tenure and experience contribute to the non-significant findings for females. Gender is a moder- ator. Future scholars must explore the boundary conditions of the Matthew Effect.

Implications

Nobel Laureate Albert Szent-Györgyi stated: “Discovery consists of seeing what everyone has seen, and thinking what no one has thought.” The Matthew Effect in

10 I would like to thank EIC Allan Chan and two anonymous reviewers for their constructive suggestions.

The Matthew Effect in Monetary Wisdom.

Monetary Wisdom provides innovative insights: The rich (with talents and monetary wisdom) serve God, enjoying the ultimate joy and happiness. The poor serve mammon, destroying their lives. What are the implications? “Let your life be free from love of money but be content with what you have” (Hebrews 13:5; N. Tang et al. 2019). How can we reduce the love of money? Individuals with mindfulness training (rooted in Buddhism) reduce their love of money and unethical thoughts (Gentina et al. 2020). A non-wandering mind is a happy mind (Killingsworth and Gilbert 2010). MNCs sponsor mindfulness training programs, and enhance ethical decision-making, creating a com- petitive advantage. Holistic thinking indirectly reduces risk-taking intentions via risk- taking perceptions (Chen et al. 2019). “Getting people to contemplate their standards of honesty (by recalling the Ten Commandments or signing an honor code) eliminated cheating completely” (Ariely 2008, p. 24). Religiosity reduces dishonesty (Chen and Tang 2013; Tang 2012, 2016; Tang and Tang 2010).

Based on data from “100 Best Companies to Work for in America,” making employees happy at the individual level helps reap tangible returns on investment (ROIs) at the organization-industry level (Edmans 2011). Talent Management Strategy reaps ROI (Pfeffer 1998; Porter and Kramer 2006). Paying employees well helps avoid justice-seeking dishonesty (Tang et al., 2019). Moral leaders enhance employee crea- tivity (Gu et al. 2015; Jiang et al. 2019). The Matthew Effect in CSR suggests that perceptions of CSR excite employee job satisfaction and commitment via their pride exponentially (Zhou et al. 2018). The World’s Most Ethical Companies surpassed the

Fig. 4 The Matthew Effect in talent management strategy: reducing exhaustion, increasing satisfaction, and inspiring commission among boundary spanning employees. Source: Srivastava, R.V., & Tang, T.L.P. (2021). Journal of Business and Industrial Marketing. https://doi.org/10.1108/JBIM-06-2020-0296

Tang T.L.-P.

standard and achieved a 4.88% ethics premium in 2018. (https://bela.ethisphere.com/ wp-content/uploads/leading-practices-and-trends-from-the-2018-wmec.pdf).

Conclusion

In my review, the nomological networks of theories contribute to our understanding of the Matthew Effect, leading to a multi-level theory of the Matthew Effect in Monetary Wisdom. The rich use their monetary values, think proactively, act ethically, treat CSR as a competitive advantage, frame stimuli in the immediate and omnibus contexts, and maximize expected utility and ultimate serenity-happiness across people, context, and time at the individual, organization-industry, and country-global levels. The rich get richer. The poor get poorer. This theory nudges ordinary citizens to improve choice architecture and helps them make ethical decisions and become healthier, happier, and wealthier than before.

Acknowledgements The author thanks late Fr. Wiatt Funk, late Prof. Kuan Ying Tang, and Fang Cheng Chu Tang, and Fr. Mark Sappenfield for their inspiration, Theresa Li-Na Tang for her continuous support, Editor-in-Chief Allan Chan and two anonymous reviewers for their constructive comments and suggestion, and Alex Sherrod and Alyssa Sons for their assistance. I presented portions of this paper at the 25th International Academy of Management and Business (IAMB), Lisbon, Portugal, October 17–19, 2018.

Author contribution TLPT reviewed the literature, wrote the paper, and approved the final version for publication.Data availabilityThis research does not collect empirical data from individuals.

Declarations

Ethics approval There is no ethics approval for this study.

Consent to participate None.

Conflict of interest The author declares no competing interests.

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The Matthew Effect in Monetary Wisdom.