Teaching Equality vs. Efficiency (Or, What Happens When You Learn Economics)

Recently, I posted about the effect of learning Economics (“Blasts From Research Past: Economists Free Ride Does Anyone Else?”) on selfishness and related behaviors. Today I came across a brand new study that tries to tackle the same questions, but manages to deal more effectively with the self-selection problems. Three researchers looked at Yale Law Students and their behavior in a set of “dictator” games, where each player has the opportunity to give up some or all of his chips to give some to the other, and the amount the other player received varied (e.g. sometimes giving up 1 chip gave the other player 2). Yale Law Students are randomly assigned first-year teachers in Contracts and Torts. Some of these professors are economists or are affiliated with Law and Economics as a field, while others are trained in the humanities. By comparing students taught by economists vs. humanities folks, the researchers teased out the selection problem (somewhat, anyway, these are all people who went to Yale Law) and came up with some findings. Here’s one of the authors talking in Forbes:

The students made 50 decisions about giving. In some cases students started with $10, and for each dollar they gave up, their (anonymous) partner in the game would get, say, $5. In this case, giving was “cheap.” In others, giving was expensive (each dollar given up yielded only 20 cents for the partner).

Someone who gives a lot when it’s cheap and keeps most of the pie for himself when giving is expensive focuses on efficiency: He’s making sure the maximum amount is paid out to him and his partner combined. Someone who keeps 80% of the pie when it would be cheap to give is more focused on equality. Someone who always keeps everything, regardless of the price of giving, is just plain selfish, the very embodiment of the rational, self-interested Homo economicus.

It turns out that exposure to economics makes a big difference in how students split the pie, in terms of both efficiency and outright selfishness. Students assigned to classes taught by economists were more likely to give a lot when it was cheap to do so. But they were also much more likely to take the whole pie for themselves.

And here’s the draft version of the article, “Exposure to Ideology and Distributional Preferences”. Another quote, from the conclusions to the paper,

While this unified theory remains a long way off, our experiments make two important contributions towards such a theory. First, they provide stronger evidence than any previous work that persons’’ distributional preferences are learned. They are not …fixed by deep and immutable background factors (such as early childhood experiences or even genes) but rather evolve, including in mature adults, in response to more recent and superficial stimuli. Moreover this evolution can be characterized not just causally but normatively, in the sense that the stimuli to which students’’ distributional preferences respond include (among other things, to be sure) normative arguments in favor of the preferences that the students eventually adopt.

Second, and equally important, our experiments yield insights into what students learn from teachers who emphasize different ideological content. Crucially, the difference between economic and humanist teaching is not just that economics encourages students to become more selfish, although this is one of our …findings. Rather than identifying a simple difference between immoral economics and moral humanities, our study reveals that an important part of the difference between these disciplines is that they instill competing conceptions of impartiality in those who study them: students exposed to economics are relatively more likely to adopt distributive preferences that emphasize efficiency; whereas students exposed to the humanities are relatively more likely to adopt distributive preferences that emphasize equality.

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