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Perhaps the most revealing experimental “anomaly” came from a study at Stanford University, where one group of subjects was instructed to play a publ… - Joseph Heath
" "Perhaps the most revealing experimental “anomaly” came from a study at Stanford University, where one group of subjects was instructed to play a public goods game called “the community game,” and another asked to play one called “the Wall Street game.” The two problems were in fact identical, but the rates of cooperation in “the community game” were twice as high as in “the Wall Street game.” (Cooperation in the former was around the “normal” rate of two-thirds; in the latter it was abnormally low, at about one-third.) Another version of this study, carried out among Israeli air force trainers, showed approximately the same effect. In that study, however, instructors were asked to predict how their trainees (whom they knew quite well) would behave. Interestingly, not only were the instructors wrong (they did no better than chance at predicting the behavior of their trainees), but they also made the mistake of ignoring the effect that the name of the game might have upon rates of cooperation and defection.
In this respect, the trainers fell victim to the same fallacy that has plagued generations of economists. It is, in fact, a general flaw in our everyday social reasoning, which social psychologists refer to as an extrinsic incentive bias. Simply put, people have a tendency to overestimate the importance of external incentives in motivating human conduct. In particular, we have a natural tendency to overestimate the influence of power, money, and status in motivating other people’s decisions.
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About Joseph Heath
Joseph Heath (born 1967) is a Canadian philosopher.
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Additional quotes by Joseph Heath
So we need to have a state; the market cannot do everything. In particular, the market cannot arise spontaneously: it must be created, and its fundamental rules must be enforced, by the state. People have tried to square this circle in hundreds of different ways, but no matter how you run the numbers, the results always come back the same: You can’t get a market economy out of self-interest alone. What is required—and what self-interest cannot provide—is an honest enforcement agency to impose Hume’s three “fundamental laws”: to protect private property, to ensure the voluntariness of exchange, and to enforce contracts. This enforcement agency must remain neutral among the rival parties; its services cannot simply be available to the highest bidder. In order for its threats to be credible, the enforcement agency must be motivated by some principled commitment to ensuring respect for the law.
One of my favorite Paul Krugman papers is called “Ricardo’s difficult idea” — on why people have such a hard time understanding the concept of “comparative advantage.” Although the situation is not quite as bad, I’ve been struck recently by how much difficulty many people have trying to understand the concept of a “collective action problem.” Although that idea has a bit more history to it, I don’t think it’s too much of a distortion of the record to call this “Hobbes’s difficult idea.”
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