When "Being Rational" makes you Irrational

Here's a blog entry by Mark Thoma noting some results on "fairness" citing two different research results by other groups. Here's the "happy news" result:

The human brain responds to being treated fairly the same way it responds to winning money and eating chocolate, UCLA scientists report. Being treated fairly turns on the brain's reward circuitry.

We are social animals and this "natural wiring" helps reinforce our social actions. My only quibble with the snippet reporting the research is the failure to note that the degree of response varies, i.e. not everybody is wired the same way. Or, another way of putting it, there are some wolves in amongst us social sheep who will take advantage of our impulse toward fairness.

But there is also something else dark and sinister lurking out there. A little bit of education can turn a sheep into a wolf. The Thomas blog entry also points to this research result checking how being taught "economics" might interfere with this "fairness" circuitry:

All students are required to take courses in contracts and in torts, and they're randomly assigned to an instructor for each class. Some of these teachers have Ph.D.s in economics, some in philosophy and other humanities, and some have no strong disciplinary allegiances at all. Professors are encouraged to design their courses as they see fit. Instructors from economics may emphasize the role of contracts in making possible the efficiency gains of the marketplace, while philosophers may emphasize equal outcomes for contracting parties. So economists teach about efficiency and philosophers teach about equality. ...

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.

These findings hint at the influence that powerful ideas may have in shaping how we see the world, even late in life.