Re: The dismal science

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Frank, Robert H., Thomas Gilovich, and Dennis T. Regan. 1993. "Does Studying Economics
Inhibit Cooperation?" Journal of Economic Perspectives, 7: 2 (Spring): pp. 159-72.
  159: "exposure to the self-interest model commonly used in economics alters the extent to
which people behave in self-interested ways."
  159-60: Marwell, Gerald and Ruth Ames. 1981. "Economists Free Ride, Does Anyone Else?"
Journal of Public Economics, 15, pp. 295-310 experimented with groups of 32 subjects given
an initial endowment of money, which they were to allocate between a public and a private
account.  Money in the private account was returned directly to the subject at the end of
the experiment.  Money deposited in the public account was pooled, then multiplied by a
factor greater than one,and then distributed equally among all subjects.  The socially
optimal strategy was to put all money in the public account.  First year graduate students
in economics contributed 20% of their money to the public account.  The non-economics
control group, 47%.
  160: Marwell and Ames asked their subjects two questions: What is a "fair" investment in
the public good?  Are you concerned about "fairness" in making your investment decisions."
In answer to the first question, 75% of the non-economists answered "half or more."25%,
"all." In response to the second question, almost all non-economists answered "yes."  More
than 1/3 of the economists either refused to answer the question about fairness or gave
very complex uncodable responses.  They were almost half as likely as other to indicate a
concern with fairness.
  160: They have been criticized that their non-economist control groups consisted of high
school students, which are younger and more evenly distributed among genders.
  162-3: Frank et al. surveyed charitable giving by college professors randomly chosen from
the professional directories of 23 disciplines and then grouped into 7 areas.  They asked
how much each person gave to a variety of charities.  The proportion of free riders among
economists was more than double that of any of the other 6 areas surveyed.  The median gift
to public tv for Art, Architecture, and Music was $30.  Economics, much less than $1.
  161: Carter, John and Michael Irons. 1991. ""Are Economists Different, and If So, Why?"
Journal of Economic Perspectives, 5 (Spring); and 1990 (longer version), College of the
Holy Cross (December).
  161: Carter and Irons. 1990. examined the ultimatum bargaining game.  Two players, an
allocator and a receiver.  The former is given $10 and must divide it between himself and
the receiver.  The receiver may accept and each gets the allocated amounts.  Or the
receiver may refuse, causing neither to get any money.  The game is played only once by the
same partners.
  161: The optimal division is to keep $9.99 and leave the penny for the receiver, since a
penny is better than nothing.  The game is not repeated, so there is no possibility of
working out co-operation.
  161: 50-50 splits are the most common outcome, and most one sided offers are rejected out
of concerns about fairness.
  In a sample of 43 economics majors, the average amount acceptable by the receiver was
$1.70, as compared with an average of $2.44 for non-economics major.  The allocators mean
proposal was $6.15 for economics majors; only $5.44 for non-majors.  Thus economists behave
more in a self-interested manner.  This study might have one defect.  Allocators earned
that role by having earned high scores on a preliminary word game; they might consider
themselves to be entitled to a greater share of the surplus.
  Kahneman, Daniel, Jack Knetsch, and Richard Thaler. 1986. "Fairness and the Assumption of
Economics." Journal of Business, 59, p. S286-S300 report similar results.
  163ff: Frank et al. report on a prisoner's dilemma game.  Again, economists behave in a
more self-interested way.
  Do economists learn to be have differently or are self-interested people attracted to
economics.

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu