Does studying economics make you more selfish?

When economics students learn about what makes fellow humans tick it affects the way they treat others. Not necessarily in a good way, as Tom Stafford explains.

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.

This is my column from BBC Future last week. You can see the original here. Thanks to Eric for some references and comments on this topic.

13 thoughts on “Does studying economics make you more selfish?”

    — John Kenneth Galbraith

  2. Of course, people may choose economics as a stepping stone to an MBA, which means they are selfish bastards before they are economics majors.

  3. Reblogged this on Shamnaaz B. Sufrauj's Weblog and commented:
    I can relate. As a student I did believe that the “rational” was superior to the “normal”. Indeed, we’ve been conditioned to some extent to think rationally and we keep being advised to do so!!

  4. I too would be curious how many of these subjects were from old money or had conservative party affiliation. Doesn’t answer the chicken and egg question though. Wasn’t there a study that showed people in expensive cars were more likely to pin it towards pedestrians in a crosswalk?

  5. students and teachers of ethical philosophy don’t seem to behave more ethically when their behaviour is assessed

    This is put into good context if you observe Atheist groups or Jonathon Haidt in that dismal Beyond Belief seminar. I used to expect these folks would be more engaged and connected, not less.

  6. Very interesting analysis. As you say, the results are not conclusive but they are very consequential for the U.S. where consensus is so illusive. It makes me wonder if there are some indicators (behavioral or subjective questionnaires) that can effectively separate selfish from cooperative individuals. While politicians say they are working for the public interest, it is my hunch that our “debate” is led more by selfishness than a desire for solutions to benefit the masses. It is time to distinguish the me-people from the we-people.

  7. Looking back, I should have realized I was in the wrong field of study (Business) when I took economics. When assured that all economic decisions were rational, I raised my hand and asked “Then please explain to me half of what is in my closet.” I was told I was being factious, but I wasn’t. Unlike my fellow students and most of my professors, I had actually worked for several years before I went back to school, and had seen with my own eyes that rationality and logic have little to nothing to do with most business decisions, that most of them are based on expediency or who’s trying to get one up on whom. I cheered out loud a few years ago when I saw a study that showed that sex and money light up the exact same parts of the brain, because sex is the only part of human life where I see people making as many consistently stupid decisions as they do with their money. The idea we use the same cells to think about them both is an idea I can believe. This Gospel of The “Rational Man” has made me laugh for years because I’ve seen again and again what an incredible conceit it is. Unfortunately it is a conceit influencing powerful people and government policy that can lead to real human suffering, and that is not funny at all.

  8. amelie:
    I suspect philosophers are no longer studying how to justify right actions (“what makes a right act right?”), but rather busy showing why it’s wrong to judge others (and thus it is also wrong for others to judge us). Attempting to prove, so to speak, that ethics doesn’t matter (no bad consequences are justified for bad behavior; no judgment is correct). Just a hunch from an old philosopher.

    1. Also the fountainhead of modern economics is Adam Smith who, with David Hume, considered self-interest the fundamental principle of action. The aggregate of all unbridled self-interests drive the economy — self-interest is the raw market force. And it is emotional, where altruism is not: “There is no action, except as the will desires” and “The will is, and ought to be, the slave of the passions.” Teach these two Philosophers to a class of Econ majors, and Lo! Ethics is whatever flies, and so is economics.

  9. I disagree with the title and argumentation of the article, and the experiment that is reported. The main purpose of economics is to understand human behaviour in an environment of limited resources. Economics presupposes rational behaviour, but rationality should not be equated with selfishness, at least not in the short-sighted sense that is implied in such experiments. In fact, the study of economics enables a deeper understanding of human behaviour, and without this understanding, few good things can be achieved. A well-written article, although I disagree with the ideas.

  10. Being a student of economics doesn’t make you selfish,the choice of being selfish depends on an individual,and not the theories and principles he/she is taught in economics.
    As a student of economics,many people has told me how economist can self-centered,but i just tell them economics doesn’t teach you to be selfish,it teaches you to be rational(wise).

  11. I don’t think studying economics necessarily makes you more selfish, it just makes you more aware of the analysis that’s going on. You believe you know the rules of the game we’re all playing when everyone else doesn’t. I think it’s more a form of isolation which can strengthen the sense of self to unhealthy levels, but it doesn’t have to.

    The problem is, though, it’s all based on an imaginary rational actor that does not truly exist. It can be even more isolating when/if an economist who believes too much in these theories realizes that.

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