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Does studying economics make you more selfish?

2013-10-22 07:59:48

Tom Stafford

Learning more about human behaviour can affect the way we treat others, Tom

Stafford says. And not always in a good way.

Studying human behaviour can be like a dog trying to catch its own tail. As we

learn more about ourselves, our new beliefs change how we behave. Research on

economics students showed this in action: textbooks describing facts and

theories about human behaviour can affect the people studying them.

Economic models are often based on an imaginary character called the rational

actor, who, with no messy and complex inner world, relentlessly pursues a set

of desires ranked according to the costs and benefits. Rational actors help

create simple models of economies and societies. According to rational choice

theory, some of the predictions governing these hypothetical worlds are common

sense: people should prefer more to less, firms should only do things that make

a profit and, if the price is right, you should be prepared to give up anything

you own.

Another tool used to help us understand our motivations and actions is game

theory, which examines how you make choices when their outcomes are affected by

the choices of others. To determine which of a number of options to go for, you

need a theory about what the other person will do (and your theory needs to

encompass the other person's theory about what you will do, and so on).

Rational actor theory says other players in the game all want the best outcome

for themselves, and that they will assume the same about you.

The most famous game in game theory is the prisoner's dilemma , in which you

are one of a pair of criminals arrested and held in separate cells. The police

make you this offer: you can inform on your partner, in which case you either

get off scot free (if your partner keeps quiet), or you both get a few years in

prison (if he informs on you too). Alternatively you can keep quiet, in which

case you either get a few years (if your partner also keeps quiet), or you get

a long sentence (if he informs on you, leading to him getting off scot free).

Your partner, of course, faces exactly the same choice.

If you're a rational actor, it's an easy decision. You should inform on your

partner in crime because if he keeps quiet, you go free, and if he informs on

you, both of you go to prison, but the sentence will be either the same length

or shorter than if you keep quiet.

Weirdly, and thankfully, this isn't what happens if you ask real people to play

the prisoner's dilemma. Around the world, in most societies, most people

maintain the criminals' pact of silence. The exceptions who opt to act solely

in their own interests are known in economics as "free riders" individuals

who take benefits without paying costs.

Self(ish)-selecting group

The prisoner's dilemma is a theoretical tool, but there are plenty of parallel

choices and free riders in the real world. People who are always late for

appointments with others don't have to hurry or wait for others. Some use roads

and hospitals without paying their taxes. There are lots of interesting reasons

why most of us turn up on time and don't avoid paying taxes, even though these

might be the selfish "rational" choices according to most economic models.

Crucially, rational actor theory appears more useful for predicting the actions

of certain groups of people. One group who have been found to free ride more

than others in repeated studies is people who have studied economics. In a

study published in 1993, Robert Frank and colleagues from Cornell University,

in Ithaca, New York State, tested this idea with a version of the prisoner's

dilemma game. Economics students "informed on" other players 60% of the time,

while those studying other subjects did so 39% of the time. Men have previously

been found to be more self-interested in such tests, and more men study

economics than women. However even after controlling for this sex difference,

Frank found economics students were 17% more likely to take the selfish route

when playing the prisoner's dilemma.

In good news for educators everywhere, the team found that the longer students

had been at university, the higher their rates of cooperation. In other words,

higher education (or simple growing up), seemed to make people more likely to

put their faith in human co-operation. The economists again proved to be the

exception. For them extra years of study did nothing to undermine their selfish

rationality.

Frank's group then went on to carry out surveys on whether students would

return money they had found or report being undercharged, both at the start and

end of their courses. Economics students were more likely to see themselves and

others as more self-interested following their studies than a control group

studying astronomy. This was especially true among those studying under a tutor

who taught game theory and focused on notions of survival imperatives

militating against co-operation.

Subsequent work has questioned these findings, suggesting that selfish people

are just more likely to study economics, and that Frank's surveys and games

tell us little about real-world moral behaviour. It is true that what

individuals do in the highly artificial situation of being presented with the

prisoner's dilemma doesn't necessarily tell us how they will behave in more

complex real-world situations.

In related work, Eric Schwitzgebel has shown that students and teachers of

ethical philosophy don't seem to behave more ethically when their behaviour is

assessed using a range of real-world variables. Perhaps, says Schwitzgebel, we

shouldn't be surprised that economics students who have been taught about the

prisoner's dilemma, act in line with what they've been taught when tested in a

classroom. Again, this is a long way from showing any influence on real world

behaviour, some argue.

The lessons of what people do in tests and games are limited because of the

additional complexities involved in real-world moral choices with real and

important consequences. Yet I hesitate to dismiss the results of these

experiments. We shouldn t leap to conclusions based on the few simple

experiments that have been done, but if we tell students that it makes sense to

see the world through the eyes of the selfish rational actor, my suspicion is

that they are more likely to do so.

Multiple factors influence our behaviour, of which formal education is just

one. Economics and economic opinions are also prominent throughout the news

media, for instance. But what the experiments above demonstrate, in one small

way at least, is that what we are taught about human behaviour can alter it.