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-<H3>Does Studying Economics Inhibit Cooperation?</H3>
-<CENTER>by<br>
-Robert H. Frank, Thomas Gilovich, and Dennis T.  Regan</center>
-<P>In an essay written in 1879, Francis Amasa Walker
- tried to explain "why economists tend to be in bad odor amongst real
- people." Walker, who went on to become the first president of the American
- Economic Association, argued that it was partly because economists
- disregard "...the customs and beliefs that tie individuals to their
- occupations and locations and lead them to act in ways contrary to the
- predictions of economic theory."</P>
-<P>More than a century later, the general public
- continues to regard economists with suspicion. This attitude stems in part
- from an apparent misunderstanding of economists' positions on important
- public policy issues. For example, economists commonly advocate auctioning
- rights to discharge atmospheric pollutants to the highest bidders, leading
- critics to bemoan economists' "shocking disregard for the environment and
- lack of compassion for the poor." What else, the critics ask, could enable
- them to support a program under which "the rich can pollute to their
- heart's content?" On closer examination, however, the economist's position
- is less hostile to the interests of the poor and the environment than it 
- appears. Indeed, as almost every economics student now knows, the effect of 
- auctioning pollution rights is to concentrate the burden of pollution 
- reduction in the hands not of the poor but of those people and firms who 
- can reduce pollution at the lowest cost. And this is an outcome that is 
- clearly in the interests of all citizens, rich and poor alike.</P>
-<P>Misunderstandings of this sort aside, there remains 
- another important source of public skepticism toward economics-- namely, 
- the perception that economics encourages people to act selfishly in pursuit 
- of their own material interests. In this paper, we examine the validity of 
- this perception.</P>
-<P><STRONG>Economists and the Self-Interest Model</STRONG></P>
-<P>If pressed, most economists will concede that 
- people sometimes care about more than just their own material well being. 
- Many have concerns for the welfare of other people, for esthetics, for 
- their duties as citizens, and so on. </P>
-<P>Yet few economists include these broader concerns 
- in their models of human behavior. It may well be that the unpaid volunteer 
- who heads the local United Way Campaign is driven purely by his concern for 
- the disadvantaged; but economists feel on much firmer ground if they can 
- identify some more narrowly self-interested motive for his action. And on 
- inspection, there is at least some evidence in support of their cynicism. 
- When we examine the membership rolls of volunteer organizations, we find 
- that insurance brokers, real estate agents, car dealers, chiropractors, and 
- others with something to sell tend to be disproportionately represented. 
- Such organizations have less than their share of truck drivers and postal 
- employees.</P>
-<P>The self-interest model has well established 
- explanatory power. Whatever role love may play in the sustenance of 
- marriage relationships, we know that divorce rates are higher in states 
- that provide liberal welfare benefits. When energy prices rise, people are 
- more likely to form car pools and to insulate their houses. When the 
- opportunity cost of time rises, people have fewer children. And so on. From 
- the economist's perspective, motives other than self-interest may matter, 
- but they are peripheral to the main thrust of human endeavor, and we 
- indulge them at our peril. In Gordon Tullock's words, "the average human 
- being is about 95 percent selfish in the narrow sense of the term." </P>
-<P>From its base in economics, the self-interest model 
- has made strong inroads into a variety of other disciplines. Psychologists, 
- political scientists, sociologists, philosophers, game theorists, 
- biologists, and others rely increasingly on this model to explain and 
- predict human behavior. </P>
-<P>The basic question we investigate in this paper is 
- whether exposure to the self-interest model alters the extent to which 
- people behave in self-interested ways. The paper is organized into two 
- parts. In the first, we report the results of a series of empirical 
- studies-- some our own, some by other investigators-- that support the 
- hypothesis that economists behave in more self-interested ways. By itself, 
- this evidence does not demonstrate that exposure to the self-interest model 
- is the <I>cause</I> of more self-interested behavior, although, as we will 
- see, a case can be made for this proposition on a priori grounds. An 
- alternative interpretation is that economists may simply have been more 
- self-interested to begin with, and this difference was one reason they 
- chose to study economics. In the second part of the paper, we present 
- preliminary evidence that exposure to the self-interest model does in fact 
- increase self-interested behavior.</P>
-<STRONG><P>I. Do Economists Behave Differently?</P>
-<P>A. The Free-Rider Experiments</P>
-</STRONG><P>One of the clearest predictions of the 
- self-interest model is that people will tend to free-ride on the efforts of 
- others when it comes to the provision of public or collective goods. Even 
- people who would strongly benefit from having, say, higher program quality 
- on public TV have little incentive to contribute. After all, any single 
- individual's contribution is far too small to alter the likelihood of 
- achieving the desired outcome.</P>
-<P>A study by Gerald Marwell and Ruth Ames found that 
- students of economics are indeed much more likely to free-ride in 
- experiments that called for private contributions to public goods. Their 
- basic experiment involved a group of subjects who were given an initial 
- endowment of money, which they were to allocate between two accounts, one 
- "public," the other "private." Money deposited in a subject's private 
- account was returned dollar for dollar to the subject at the end of the 
- experiment. Money deposited in the public account was first pooled, then 
- multiplied by some factor greater than one, and then distributed equally 
- among all subjects. </P>
-<P>Under these circumstances, the socially optimal 
- behavior is for each subject to put her entire endowment in the public 
- account. But the individually most advantageous strategy is to put all of 
- it in the private account. The self-interest model predicts that all 
- subjects will follow the latter strategy. Most don't. Across eleven 
- replications of the experiment, the average contribution to the public 
- account was approximately 49 percent.</P>
-<P>It was only in a twelfth replication with 
- first-year graduate students in economics as subjects that Marwell and Ames 
- obtained results more nearly consistent with the self-interest model. These 
- subjects contributed an average of only 20 percent of their initial 
- endowments to the public account, a figure significantly less than the 
- corresponding figure for noneconomists (p&lt;.05).</P>
-<P>On completion of each replication of the experiment, Marwell and Ames 
- asked their subjects two followup questions:</P>
-<P>1. What is a "fair" investment in the public good?</P>
-<P>2. Are you concerned about "fairness" in making your investment 
- decision?</P>
-<P>In response to the first question, 75 percent of 
- the noneconomists answered "half or more" of the endowment, and 25 percent 
- answered "all." In response to question 2, almost all noneconomists 
- answered "yes." The corresponding responses of the economics graduate 
- students were much more difficult to summarize. As Marwell and Ames 
- wrote,</P>
-<DIR> <DIR> 
-<P>.... More than one-third of the economists either 
- refused to answer the question regarding what is fair, or gave very 
- complex, uncodable responses. It seems that the meaning of 'fairness' in 
- this context was somewhat alien for this group. Those who did respond were 
- much more likely to say that little or no contribution was 'fair.' In 
- addition, the economics graduate students were about half as likely as 
- other subjects to indicate that they were 'concerned with fairness' in 
- making their decisions.</P>
-</DIR>
-</DIR>
-
-<P>The Marwell and Ames study can be criticized on the 
- grounds that their noneconomist control groups consisted of high school 
- students and college undergraduates, who differ in a variety of ways from 
- first-year graduate students in any discipline. Perhaps the most obvious 
- difference is age. As we will see, however, criticism based on the age 
- difference is blunted by our own evidence that older students generally 
- give greater weight to social concerns like the ones that arise in 
- free-rider experiments. It remains possible, however, that more mature 
- students might have had a more sophisticated understanding of the nuances 
- and ambiguities inherent in concepts like fairness, and for that reason 
- gave less easily coded responses to the followup questions.</P>
-<P>Yet another concern with the Marwell and Ames 
- experiments is not easily dismissed. Although the authors do not report the 
- sex composition of their group of economics graduate students, such groups 
- are almost always preponderantly male. The authors' control groups of high 
- school and undergraduate students, by contrast, consisted equally of males 
- and females. As our own evidence will later show, there is a sharp tendency 
- for males to behave less cooperatively in experiments of this sort. So 
- while the Marwell and Ames findings are suggestive, they do not clearly 
- establish that economists behave differently.</P>
-<P><STRONG>B. Economists and the Ultimatum Bargaining Game</STRONG></P>
-<P>The other major study of whether economists 
- behave differently from members of other disciplines is by John Carter and 
- Michael Irons (1991). These authors measured the self-interestedness of 
- economists by examining their behavior in the ultimatum bargaining game. 
- This is a simple game with two players, an "allocator" and a "receiver." 
- The allocator is given a sum of money (in these experiments, $10), and must 
- then propose how to divide this sum between herself and the receiver. 
- Suppose, for example, the allocator proposes $X for herself, the remaining 
- $(10-X) for the receiver. Once the allocator makes this proposal, the 
- receiver has two choices: (1) he may accept, in which case each player gets 
- the amount proposed by the allocator; or (2) he may refuse, in which case 
- each player gets zero. The game is played only once by the same 
- partners.</P>
-<P>If both players behave according to the 
- self-interest model, the model makes an unequivocal prediction about how 
- the game will proceed. Assuming the money cannot be divided into units 
- smaller than one cent, the allocator will propose $9.99 for herself and the 
- remaining $0.01 for the receiver, and the receiver will accept on the 
- grounds that a penny is better than nothing. Since the game will not be 
- repeated, there is no point in the receiver turning down a low offer in the 
- hope of generating a better offer in the future.</P>
-<P>Other researchers have shown that the strategy 
- predicted by the self-interest model is almost never followed in practice: 
- 50-50 splits are the most common outcome, and most one-sided offers are 
- rejected out of concerns about fairness. </P>
-<P>The research strategy employed by Carter and Irons 
- was to compare the performance of economics majors and other students and 
- see which group came closer to the predictions of the self-interest model. 
- In a sample of 43 economics majors, the average minimum amount acceptable 
- by the receiver was $1.70, as compared with an average of $2.44 for a 
- sample of 49 noneconomics majors (p&lt;.05). As receivers then, economics 
- majors came significantly closer than nonmajors to the behavior predicted 
- by the self-interest model.</P>
-<P>In the allocator's role as well, economics majors 
- performed more in accordance with the predictions of the self-interest 
- model than did nonmajors. Economics proposed to keep an average of $6.15 
- for themselves, as compared to an average of only $5.44 for the sample of 
- 49 nonmajors (p&lt;.01). </P>
-<P>Kahneman, Knetsch, and Thaler (1986) report 
- findings similar to those of Carter and Irons: commerce students (the term 
- used to describe business students in Canadian universities) were more 
- likely than psychology students to make one-sided offers in ultimatum 
- bargaining games.</P>
-<P>One difficulty with the Carter and Irons results is 
- that the way they assigned the allocator and receiver roles leaves open 
- possible differences in the interpretation of what behavior is required in 
- the name of fairness. In particular, allocators earned their role by having 
- achieved higher scores on a preliminary word game. Allocators might thus 
- reason that they were entitled to a greater share of the surplus on the 
- strength of their earlier performance. The observed differences in the 
- behavior of economics majors and nonmajors might therefore be ascribed to a 
- differential tendency to attach significance to the earlier performance 
- differences. The training received by economics students in the marginal 
- productivity theory of wages lends at least surface plausibility to this 
- interpretation.</P>
-<P>To summarize the existing literature, both the 
- Marwell and Ames and Carter and Irons papers provide evidence consistent 
- with the hypothesis that economists tend to behave less cooperatively than 
- noneconomists. But because of the specific experimental design problems 
- mentioned, neither study is conclusive. In the following sections we 
- describe our own attempts to test the hypothesis that economists behave 
- less cooperatively.</P>
- <P><STRONG>C. Survey Data on Charitable Giving </STRONG></P>
-<P>The central role of the free-rider hypothesis 
- in modern economic theory suggests that economists might be less likely 
- than others to make gifts to private charities. To explore this 
- possibility, we mailed questionnaires to 1245 college professors randomly 
- chosen from the professional directories of 23 disciplines, asking them to 
- report the annual dollar amounts they gave to a variety of private 
- charities. We received 576 responses with sufficient detail for inclusion 
- in our study. Respondents were grouped into the following disciplines: 
- economics (N  75); other social sciences (N  106); math, computer 
- science, and engineering (N  48); natural sciences (N  98); humanities 
- (N  94); architecture, art, and music (N  68); and professional (N  87). 
- Members of every discipline, even economics, fell far short of the 
- prediction of the strong version of the free-rider hypothesis. But the 
- proportion of pure free riders among economists (that is, those who 
- reported giving no money to any charity) was more than double that of any 
- of the other six areas included in the survey. (See Figure 1.)</P>
-<P ALIGN=CENTER><IMG SRC="image1.jpg" WIDTH=465 HEIGHT=199></P>
-<FONT FACE="Times">
-<P><STRONG>Figure 1. Proportion of Pure Free Riders in Seven Disciplines.
-</STRONG></p>
-<P>Although we do not have data on the gender of each 
- survey respondent, gender differences by discipline do not appear to 
- account for the pattern of free-ridership shown in Figure 1. For example, 
- the natural sciences, which are also preponderantly male, had only 
- one-third as many free riders as did economics.</P>
-<P>Despite their generally higher incomes, economists 
- were also among the least generous in terms of their median gifts to large 
- charities like viewer-supported television and the United Way, which are 
- shown in Figures 2 and 3, respectively. </P>
-</FONT><P ALIGN=CENTER><IMG SRC="image2.jpg" WIDTH=480 HEIGHT=205></P>
-<FONT FACE="Times">
-<P><STRONG>Figure 2. Median Gift to Public Television </STRONG></P>
-</FONT><P ALIGN=CENTER><IMG SRC="image3.jpg" WIDTH=488 HEIGHT=201></P>
-<FONT FACE="Times">
-<P><STRONG>Figure 3. Median Gift to the United Way </STRONG></P>
-<P>In fairness to the self-interest model, we should 
- note that there may be self-interested reasons for contributing even in the 
- case of charities like the United Way and public television. United Way 
- campaigns, for example, are usually organized in the workplace and there is 
- often considerable social pressure to contribute. Public television fund 
- drives often make on-the-air announcements of donors' names and economists 
- stand to benefit just as much as the members of any other discipline from 
- being hailed as community-minded citizens. In the case of smaller, more 
- personal charitable organizations, there are often even more compelling 
- self-interested reasons for giving. After all, failure to contribute in 
- accordance with one's financial ability may mean outright exclusion from 
- the substantial private benefits associated with membership in religious 
- groups, fraternal organizations, and the like. </P>
-<P>An examination of economists' gifts to other 
- charities revealed that their median annual gift is actually slightly 
- larger, in absolute terms, than the median for all disciplines taken as a 
- whole. But because economists have significantly higher salaries than do 
- the members of most other disciplines, these data, like the data shown in 
- Figures 2 and 3, tend to overstate the relative generosity of economists. 
- Unfortunately, we do not have direct income measures for the respondents in 
- our survey, but we do have the number of years each respondent has been a 
- practitioner in his or her discipline. In an attempt to take income effects 
- into account, we estimated earnings functions (salary vs. years of 
- experience) for each discipline using data from a large private university. 
- We then applied the estimated coefficients from these earnings functions to 
- the experience data from our survey to impute an income estimate for each 
- respondent in our survey. Finally, we used these imputed income figures, 
- together with our respondents' reports of their total charitable giving to 
- estimate the relationship between income and total giving shown in Figure 
- 4. In the latter exercise, all economists were dropped from the sample on 
- the grounds that our object was to see whether the giving pattern of 
- economists deviates from the pattern we see for other disciplines.</P>
-<P>Thus, for example, in Figure 4 we see that a 
- noneconomist with an annual income of $44,000 (roughly, the median imputed 
- income for architects in our sample) is expected to give almost $900 per 
- year to charity, while a noneconomist with an income of $62,000 (roughly 
- the median imputed income for economists in our sample) is expected to give 
- more than $1400 per year. </P>
-</FONT><P ALIGN=CENTER><IMG SRC="image4.jpg" WIDTH=451 HEIGHT=284></P>
-<FONT FACE="Times">
-<p><STRONG>Figure 4. Charitable Giving vs. Imputed Income</STRONG></P>
-<P>Using the relationship between charitable giving 
- and income, we calculated the expected gift for each respondent as a 
- function of his or her imputed income. We then calculated our measure of a 
- discipline's generosity as the ratio of the average value of gifts actually 
- reported by members of the discipline to the average value of gifts 
- expected on the basis of the members' imputed incomes. A discipline is thus 
- more generous than expected if this ratio exceeds 1.0, and less generous if 
- it is less than 1.0. The computed ratio for economists was 0.91, which 
- means that economists in our sample gave 91 percent as much as they would 
- have been expected to give on the basis of their imputed incomes. The 
- performance of economists by this measure is compared with the performance 
- of other disciplines in Figure 5.</P>
-</FONT><P ALIGN=CENTER><IMG SRC="image5.jpg" WIDTH=472 HEIGHT=198></P>
-<P><FONT FACE="Times"><STRONG>Figure 5. The Ratio of Average Gift to Gift 
- Expected on the Basis of Income </STRONG></P>
-<P>On a number of other dimensions covered in 
- our survey, the behavior of economists was little different from the 
- behavior of members of other disciplines. For example, economists were only 
- marginally less likely than members of other disciplines to report that 
- they would take costly administrative action to prosecute a student 
- suspected of cheating. Economists were actually slightly above average for 
- the entire sample in terms of the numbers of hours they reportedly spend in 
- "volunteer activities." In terms of their reported frequency of voting in 
- presidential elections, economists were only slightly below the sample 
- average.</P>
-<P><STRONG>D. Economists and the Prisoner's Dilemma</STRONG></P>
-<P>In this section we report our results from a 
- large experimental study of how economics majors and nonmajors perform in 
- the prisoner's dilemma game. </P>
-<P>Table 1 shows the monetary payoffs in dollars to 
- two players, X and Y, in a standard prisoner's dilemma. In Table 1, as in 
- all prisoner's dilemmas, each player gets a higher payoff when each 
- cooperates than when each defects. But when one player's strategy is fixed, 
- the other player always gets a higher payoff by defecting than by 
- cooperating; and hence the dilemma. By following individual self-interest, 
- each player does worse than if each had cooperated. </P>
-</FONT><P ALIGN=CENTER><IMG SRC="image6.jpg" WIDTH=280 HEIGHT=231></P>
-<FONT FACE="Times">
-<P><STRONG>Table 1. Monetary Payoffs for a Prisoner's Dilemma Game
-</STRONG></P>
-<P>One of the most celebrated and controversial 
- predictions of the self-interest model is that people will always defect in 
- one-shot prisoner's dilemmas. The game thus provides an opportunity to 
- examine the extent to which various groups exhibit self-interested 
- behavior. Accordingly, we conducted a large one-shot prisoner's dilemma 
- experiment involving both economics majors and nonmajors. Many of our 
- subjects were students recruited from courses in which the prisoner's 
- dilemma is an item on the syllabus. Others were given a detailed briefing 
- about the game. </P>
-<P>Our subjects met in groups of three and each was 
- told that he would play the game once with each of the other two subjects. 
- The payoff matrix, shown in Table 1, was the same for each play of the 
- game. Subjects were told that the games would be played for real money, and 
- that none of the players would learn how their partners had responded in 
- each play of the game. (More below on how confidentiality was 
- maintained.)</P>
-<P>Following a period in which subjects were given an 
- opportunity to get to know one another, each subject was taken to a 
- separate room and asked to fill out a form indicating his response 
- (cooperate or defect) to each of the other two players in his group. After 
- the subjects had filled out their forms, the results were tallied and the 
- payments disbursed. Each subject received a single payment that was the sum 
- of three separate amounts: (1) the payoff from the game with the first 
- partner; (2) the payoff from the game with the second partner; and (3) a 
- term that was drawn at random from a large list of positive and negative 
- values. None of these three elements could be observed separately, only 
- their sum. </P>
-<P>The purpose of the random term was to make it 
- impossible for a subject to infer from her total payment how any of the 
- other subjects had played. It prevented both the possibility of inferring 
- individual choices and also of inferring even group patterns of choice. 
- Thus, unlike earlier prisoner's dilemma experiments, ours did not enable 
- the subject to infer what happened even when each<I> </I>(or neither) of 
- her partners defected. </P>
-<P>In one version of the experiment (the "unlimited" 
- version), subjects were told that they could make promises not to defect, 
- but they were also told that the anonymity of their responses would render 
- such promises unenforceable. In two other versions of the experiment (the 
- "intermediate" and "limited" versions), subjects were not permitted to make 
- promises about their strategies. The latter two versions differed from one 
- another in terms of the length of pre-game interaction, with up to 30 
- minutes permitted for the intermediate groups and no more than ten minutes 
- for the limited groups. All groups were given an extensive briefing on the 
- prisoner's dilemma at the start of the experiment and each subject was 
- required to complete a questionnaire at the end to verify that he or she 
- had indeed understood the consequences of different combinations of 
- choices.</P>
-<P></P>
-<P ALIGN=CENTER><STRONG>Results for the Sample as a Whole </STRONG></P>
-<P>For the sample as a whole there were a total of 
- 267 games, which means a total of 534 choices between cooperation and 
- defection. The choices for economics majors and nonmajors are shown in 
- Figure 6, where we see that the defection rate for economics majors was 
- 60.4 percent, as compared to only 38.8 percent for nonmajors.</P>
-</FONT><P ALIGN=CENTER><IMG SRC="image7.jpg" WIDTH=364 HEIGHT=263></P>
-<FONT FACE="Times">
-<P><STRONG>Figure 6. Defection and Cooperation Rates for the 
- Sample as a Whole </STRONG></P>
-<P> ;</P>
-<P>Needless to say, this pattern of differences is 
- strongly supportive of the hypothesis that economics majors are more likely 
- than nonmajors to behave self-interestedly (p&lt;.005). </P>
-<P ALIGN=CENTER><STRONG>Adding Control Variables </STRONG></P>
-<P>Earlier we noted that one possible explanation 
- for the observed differences between economics students and others is that 
- economics students are more likely than others to be male. To control for 
- the possible influences of sex, age, and experimental condition, we 
- performed the ordinary least squares regression reported in Table 2. 
- Because each subject played the game twice, the individual responses are 
- not statistically independent. To get around this problem, we limited our 
- sample to the 207 subjects who either cooperated with, or defected on, each 
- of their two partners. The 60 subjects who cooperated with one partner and 
- defected on the other were deleted from the sample. The dependent variable 
- is the subject's choice of strategy, coded as 0 for "cooperate" and 1 for 
- "defect." The independent variables are "econ" which takes the value 1 for 
- economics majors, 0 for all others; "unlimited," which is 1 for subjects in 
- the unlimited version of the experiment, 0 for all others; "intermediate," 
- which is 1 for subjects in the intermediate version, 0 for all others; 
- "limited," which is the reference category; "sex," coded as 1 for males, 0 
- for females; and "class," coded as 1 for freshmen, 2 for sophomores, 3 for 
- juniors, and 4 for seniors.</P>
-<P><STRONG>Dependent variable:own response</STRONG></P> 
-<P>R</FONT><FONT FACE = "Times" SIZE  2>2</FONT><FONT FACE = "Times">  
-   22.2% R</FONT><FONT FACE = "Times" SIZE  2>2</FONT><FONT 
- FACE = "Times">(adjusted)    20.3%</P>
-<P>s    0.4402 with 207 - 6    201 degrees of freedom</P>
-<STRONG><P>SourceSum of SquaresdfMean SquareF-ratio</P>
-</STRONG><P>Regression11.142652.22911.5</P>
-<P>Residual38.95402010.193801</P>
-<STRONG><P>VariableCoefficients.e.t-ratio</P>
-</STRONG><P>Constant0.5791270.10415.57</P>
-<P>econ0.1688350.07802.16</P>
-<P>unlimited0.00----</P>
-<P>intermediate-0.0911890.0806-1.13</P>
-<P>limited-0.3295720.0728-4.53</P>
-<P>sex0.2399440.06423.74</P>
-<P>class-0.0653630.0303-2.16</P>
-<STRONG><P>Table 2. Whole Sample Regression</P>
-</STRONG>
-<P>Consistent with a variety of other findings on sex 
- differences in cooperation, we estimate that, other factors the same, the 
- probability of a male defecting is almost 0.24 higher than the 
- corresponding probability for a female. Even after controlling for the 
- influence of gender, we see that the probability of an economics major 
- defecting is almost 0.17 higher than the corresponding probability for a 
- nonmajor. </P>
-<P>The coefficients for the unlimited and intermediate 
- experimental categories represent effects relative to the defection rate 
- for the limited category. As expected, the defection rate is smaller in the 
- intermediate category (where subjects have more time to interact than in 
- the limited category), and falls sharply further in the unlimited category 
- (where subjects are permitted to make promises to cooperate). With 
- subjects' permission, we tape recorded the conversations of several of the 
- unlimited groups, and invariably each person promised each of his partners 
- he would cooperate. (There would be little point, after all, in promising 
- to defect.) </P>
-<P>Note, finally, that the overall defection rate 
- declines significantly as students progress through school. The class 
- coefficient is interpreted to mean that with the passage of each year the 
- probability of defection declines, on the average, by almost 0.07. This 
- pattern will prove important when we take up the question of whether 
- training in economics is the cause of higher defection rates for economics 
- majors.</P>
-<STRONG><P ALIGN=CENTER>The Unlimited Subsample</P>
-</STRONG><P>Focusing on subjects in the unlimited 
- subsample, we see in Figure 7 that the difference between economics majors 
- and nonmajors virtually disappears once subjects are permitted to make 
- promises to cooperate. For this subsample, the defection rate for economics 
- majors is 28.6 percent, for nonmajors 25.9 percent.</P>
-</FONT><P ALIGN=CENTER><IMG SRC="image8.jpg" WIDTH=314 HEIGHT=210></P>
-<FONT FACE = "Times">
-<STRONG><P>Figure 7. The Unlimited Subsample (Promises 
- Permitted)</P>
-</STRONG>
-<STRONG><P  ALIGN=CENTER>The Intermediate and Limited Subsamples</P>
-</STRONG><P>Because the higher defection rates for 
- economics majors are largely attributable to the no-promises conditions of 
- the experiment, the remainder of our analysis focuses on subjects in the 
- limited and intermediate groups. The conditions encountered by these groups 
- are of special significance because they come closest to approximating the 
- conditions that characterize social dilemmas encountered in practice. After 
- all, people rarely have an opportunity to look one another in the eye and 
- promise not to litter on deserted beaches or disconnect the smog control 
- devices on their cars. </P>
-<P> In Figure 8 we report the choices for the pooled 
- limited and intermediate groups. Comparing the entries in Figure 8 with 
- Figure 7, we see clear evidence of the higher defection rates of both 
- economics majors and nonmajors. The defection rates of 71.8 percent and 
- 47.3 percent for economics majors and nonmajors, respectively, differ 
- significantly from one another at the .01 level.</P>
-</FONT><P ALIGN=CENTER><IMG SRC="image9.jpg" WIDTH=312 HEIGHT=209></P>
-<FONT FACE="Times">
-<P><STRONG>Figure 8. Defection and Cooperation Rates for the 
- No-Promises Subsample </STRONG></P>
-<P ALIGN=CENTER><STRONG>Reasons for Cooperation and Defection</STRONG></P>
-<P>As part of the exit questionnaire that tested 
- our subjects' understanding of the payoffs associated with different 
- combinations of choices, we also asked them to state their reasons for 
- making the choices they did. We hypothesized that economists would be more 
- inclined to construe the objective of the game in self-interested terms, 
- and therefore more likely to refer exclusively to features of the game 
- itself when describing reasons for their choices. By contrast, we expected 
- the noneconomists to be more open to alternative ways of interpreting the 
- game, and thus more likely to look to their partners for cues about how to 
- play. Accordingly, we expected noneconomists to refer more often to their 
- feelings about their partners, aspects of human nature, and so on. This is 
- precisely the pattern we found. Among the sample of economics students, 31% 
- made exclusive reference to features of the game itself in explaining their 
- chosen strategies, as compared with only 17% of the noneconomists. The 
- probability of obtaining such divergent responses by chance is less than 
- .05.</P>
-<P>Another possible explanation for the economists' 
- higher defection rates is that economists may be more likely than others to 
- expect their partners to defect. The self-interest model, after all, 
- encourages such an expectation, and we know from other experiments that 
- most subjects defect if they are told that their partners are going to 
- defect. To investigate the role of expectations, we asked students in an 
- upper division public finance course in Cornell's economics department 
- whether they would cooperate or defect in a one-shot prisoner's dilemma if 
- they knew <I>with certainty</I> that their partner was going to cooperate. 
- Most of these students were economics majors in their junior and senior 
- years. Of the 31 students returning our questionnaires, 18 (58 percent) 
- reported that they would defect, only 13 that they would cooperate. By 
- contrast, just 34 percent (14 of 41) noneconomics Cornell undergraduates 
- who were given the same questionnaire reported that they would defect on a 
- partner they knew would cooperate (p&lt;.05). For the same two groups of 
- subjects, almost all respondents (30 of 31 economics students and 36 of 41 
- noneconomics students) said they would defect if they knew their partner 
- would defect. From these responses, we conclude that while expectations of 
- partner performance do indeed play a strong role in predicting behavior, 
- defection rates would remain significantly higher for economists than for 
- noneconomists even if both groups held identical expectations about partner 
- performance.</P>
-<STRONG><P>II. Why Do Economists Behave Differently?</P>
-</STRONG><P>In the preceding sections we have seen evidence 
- that economists behave less cooperatively than noneconomists along a 
- variety of different dimensions. This difference in behavior might be 
- exclusively the result of training in economics. Alternatively, it might 
- exist simply because people who chose to major in economics were different 
- initially. Or it might be some combination of these two effects. We now 
- report evidence on whether training in economics plays a causal role.</P>
-<STRONG><P>A. Comparing Upperclassmen and Underclassmen</P>
-<P></STRONG>If economics training plays a causal role in 
- uncooperative behavior, then we would expect defection rates in the 
- prisoner's dilemma experiments to rise with exposure to training in 
- economics. Again focusing on the no-promises subsample, the defection rates 
- are broken down by major and level of education in Figure 9. As shown, the 
- defection rate for economics majors is virtually the same for both 
- upperclassmen (juniors and seniors) and underclassmen (freshmen and 
- sophomores). By contrast, the defection rate for nonmajors is approximately 
- 33 percent higher for underclassmen than for upperclassmen. </P>
-</FONT><P ALIGN=CENTER><IMG SRC="image10.jpg" WIDTH=403 HEIGHT=275></P>
-<FONT FACE="Times"><P><STRONG>Figure 9. Defection Rates for 
- Upper- and Underclassmen </STRONG></P>
-<P>The pattern shown in Figure 9 continues to hold 
- when we control for the effects of other factors that influence defection 
- rates. As the regression equation summarized in Table 3 shows, the 
- defection probabilities do not differ significantly between upperclass 
- economics majors and underclass economics majors. For nonmajors, defection 
- probabilities are sharply lower than for majors in each category, and fall 
- by more than 0.16 with the transition to upperclass status.</P>
-<P><STRONG>Dependent variable:own response </STRONG></P>
-<P>R</FONT><FONT FACE="Times" SIZE=2>2</FONT><FONT FACE="Times">  
-   16.4%% R</FONT><FONT FACE="Times" SIZE=2>2</FONT><FONT 
- FACE="Times">(adjusted)    12.8%</P>
-<P>s    0.4673 with 124 - 6    118 degrees of freedom</P>
-<STRONG><P>SourceSum of SquaresdfMean SquareF-ratio</P>
-</STRONG><P>Regression5.0359951.00724.61</P>
-<P>Residual25.76241180.218325</P>
-<STRONG><P>VariableCoefficients.e.t-ratio</P>
-</STRONG><P>Constant0.6287340.1436  4.38</P>
-<P>limited0.00----</P>
-<P>intermediate-0.0950400.0876-1.09</P>
-<P>sex0.2575380.08962.88</P>
-<P>econ 1,20.00----</P>
-<P>econ 3,4-0.0269360.1623   -0.166</P>
-<P>nonecon 1,2-0.1510500.1426-1.06</P>
-<P>nonecon 3,4-0.3132660.1427-2.20</P>
-<STRONG>
-<P>Table 3. The Effect of Education Level on Defection Rates</P>
-</STRONG>
-<P>Thus, for students in general there is a 
- pronounced tendency toward more cooperative behavior with movement toward 
- graduation, a trend that is conspicuously absent for economics majors. On 
- the basis of the available evidence, we are in no position to say whether 
- the trend for noneconomists reflects something about the content of 
- noneconomics courses. But regardless of the causes of this trend, the fact 
- that it is not present for economists is consistent with the hypothesis 
- that training in economics plays at least some causal role in the lower 
- observed cooperation rates of economists.</P>
-<STRONG><P>B. Honesty Surveys</P>
-</STRONG><P>In a further attempt to assess whether training 
- in economics inhibits cooperation in social dilemmas, we posed a pair of 
- ethical dilemmas to students in two introductory microeconomics courses at 
- Cornell University and to a control group of students in an introductory 
- astronomy course, also at Cornell. In one dilemma, the owner of a small 
- business is shipped ten microcomputers but is billed for only nine and the 
- question is whether the owner will inform the computer company of the 
- error. Subjects are first asked to estimate the chances (0 - 100%) that the 
- owner would point out the mistake, and then, on the same response scale, to 
- indicate how likely <I>they</I> would be to point out the error if they 
- were the owner. The second dilemma concerns whether a lost envelope 
- containing $100 and bearing the owner's name and address is likely to be 
- returned by the person who finds it. Subjects are first asked to imagine 
- that they have lost the envelope and to estimate the likelihood that a 
- stranger would return it. They are then asked to assume that the roles are 
- reversed and to indicate the chances that they would return the money to a 
- stranger.</P>
-<P>Students in each class completed the questionnaire 
- on two occasions, first during the initial week of class in September, and 
- then during the final week of class in December.</P>
-<P>For each of the four questions, each student was 
- coded as being "more honest" if the probability checked for that question 
- rose between September and December; "less honest" if it fell during that 
- period; and "no change" if it remained the same. Our hypothesis was that 
- even a single semester of introductory microeconomics would have a 
- measurable effect both on students' expectations of the level of 
- self-interested behavior in society and on their own propensities to behave 
- self-interestedly. </P>
-<P>The first introductory microeconomics instructor 
- (instructor A) whose students we surveyed is a mainstream economist with 
- research interests in industrial organization and game theory. In class 
- lectures, this instructor placed heavy emphasis on the prisoner's dilemma 
- and related illustrations of how survival imperatives often militate 
- against cooperation. The second microeconomics instructor (instructor B) is 
- a specialist in economic development in Maoist China who did not emphasize 
- such material to the same degree, but did assign a mainstream introductory 
- text. On the basis of these differences, our expectation was that any 
- observed effects of economics training should be stronger in instructor A's 
- class than in instructor B's. The results for the three classes are 
- summarized in Figures 10-12.</P>
-<STRONG><P ALIGN=CENTER>Introductory Microeconomics A (N  48)</P>
-</STRONG></FONT><P ALIGN=CENTER><IMG SRC="image11.jpg" WIDTH=421 
HEIGHT=266></P>
-<FONT FACE="Times">
-<STRONG><P>Figure 10. Questionnaire Findings, Introductory Microeconomics A</P>
-</STRONG>
-<STRONG><P ALIGN=CENTER>Introductory Microeconomics B (N  115)</P>
-</STRONG></FONT><P ALIGN=CENTER><IMG SRC="image12.jpg" WIDTH=423 
HEIGHT=243></P>
-<FONT FACE="Times">
-<STRONG><P>Figure 11. Questionnaire Findings: Introductory Microeconomics B</P>
-</STRONG>
-<STRONG><P ALIGN=CENTER>Introduction to Astronomy</P>
-<P ALIGN=CENTER>(N  30)</P>
-</STRONG></FONT><P><IMG SRC="image13.jpg" WIDTH=422 HEIGHT=244></P>
-<STRONG><P>Figure 12. Questionnaire Findings: Introduction to Astronomy</P>
-</STRONG>
-<P>As Figures 10 and 11 indicate, a tendency toward 
- more cynical responses was observed in instructor A's introductory 
- economics class but not in instructor B's. In our control group of 
- introductory astronomy students (Figure 12), there was a weak tendency 
- toward less cynical expectations and behavior over the course of the 
- semester.</P>
-<P>It may seem natural to wonder whether the 
- differences reflected in Figures 10 and 11 might stem in part from the fact 
- that students chose their instructors rather than being randomly assigned. 
- Perhaps the ideological reputations of the two professors were known in 
- advance to many students, with the result that a disproportionate number of 
- the least cynical students chose to take instructor B's course. Two 
- observations, however, weigh heavily against this interpretation. First, 
- the average values of the initial responses to the four questions were in 
- fact virtually the same for both classes. And second, note that Figures 10 
- and 11 record not the <I>level</I> of cynicism but the <I>change</I> in 
- that level between the beginning and end of the course. Figure 11 thus 
- tells us that even if the students in Microeconomics A were more cynical to 
- begin with, they became still more so during the course of the semester. 
- This finding is consistent with the hypothesis that emphasis on the 
- self-interest model tends to inhibit cooperation.</P>
-<STRONG><P>Discussion</P>
-</STRONG><P>There have been several previous attempts to 
- discover whether economists behave in more self-interested ways than do 
- noneconomists. The Marwell and Ames finding of a greater tendency to free 
- ride on the part of economists is uncertain because their samples of 
- economists and noneconomists were different on so many dimensions other 
- than academic history and interests. The Carter and Irons findings on the 
- ultimatum bargaining game were subject to an alternative interpretation 
- based on the possibility that economics majors may have held different 
- views on how performance in the preliminary word game affected entitlements 
- in the ultimatum game.</P>
-<P>We believe our prisoner's dilemma results 
- constitute the clearest demonstration to date of a large difference in the 
- extent to which economists and noneconomists behave self-interestedly. And 
- our survey of charitable giving lends additional support to the hypothesis 
- that economists are more likely than others to free ride.</P>
-<P>But we also emphasize that both of these exercises 
- produced evidence that economists behave in traditionally communitarian 
- ways under at least some circumstances. For example, they reported spending 
- as much time as others in volunteer activities, and their total gifts to 
- charity were only slightly less than would have been expected on the basis 
- of their incomes. Finally, in the unlimited version of our prisoner's 
- dilemma experiments, where subjects were allowed to promise to cooperate, 
- economists were almost as likely to cooperate as noneconomists were.</P>
-<P>We also found evidence consistent with the view 
- that the differences in cooperativeness are caused in part by training in 
- economics. First, we saw that the gap in defection rates between economics 
- majors and nonmajors tends to widen as students move toward graduation. 
- Second, we saw that introductory microeconomics, at least if taught in a 
- certain way, seems to affect student attitudes toward honesty. </P>
-<P>Clearly, our evidence for the existence of a 
- difference between the behavior of economists and noneconomists is more 
- compelling than our evidence for the causal role of economics training in 
- creating that difference. But there is additional indirect evidence for 
- such a role. One of the clearest patterns to emerge in several decades of 
- experimental research on the prisoner's dilemma is that the behavior of any 
- given player is strongly influenced by that player's prediction about what 
- his partner will do. In experiments involving noneconomists, people who 
- expect their partners to cooperate usually cooperate themselves, and those 
- who expect their partners to defect almost always defect. In our 
- experiments, economists were 42 percent more likely than noneconomists to 
- predict that their partners would defect. It would be remarkable indeed if 
- none of this difference in outlook were the result of repeated exposure to 
- a behavioral model whose unequivocal prediction is that people will defect 
- whenever self-interest dictates.</P>
-<P>For the sake of discussion, suppose that exposure 
- to the self-interest model does, in fact, cause people to behave more 
- selfishly. Should this be a cause for concern? To the extent that norms 
- favoring cooperation help solve prisoner's dilemmas and other market 
- failures, one cost of a rise in selfish behavior is a fall in the real 
- value of economic output. Who bears this cost? By conventional accounts, it 
- is those who continue to behave cooperatively, a troubling outcome on 
- equity grounds. Several researchers have recently suggested, however, that 
- the ultimate victims of noncooperative behavior may be the very people who 
- practice it.</FONT> <FONT FACE="Times">Suppose, for example, that some 
- people always cooperate in one-shot prisoner's dilemmas while others always 
- follow the seemingly dominant strategy of defecting. If people are free to 
- interact with others of their own choosing, and if there are cues that 
- distinguish cooperators from defectors, then cooperators will interact 
- selectively with one another and earn higher payoffs than defectors. 
- Elsewhere we have shown that even on the basis of brief encounters 
- involving strangers, experimental subjects are adept at predicting who will 
- cooperate and who will defect in prisoner's dilemma games. If people are 
- even better at predicting the behavior of people they know well, it seems 
- that the direct pursuit of material self-interest may indeed often be 
- self-defeating. </P>
-<P>These observations do not challenge the obvious 
- importance of self-interest as a human motive. But they do suggest the need 
- for a richer model of 20human behavior, one that explicitly recognizes that 
- people who hold cooperative motives often come out ahead. </P>
-</FONT>
-<FONT FACE="Times"><P ALIGN=CENTER><STRONG>References </STRONG></P>
-<P>Akerlof, George. "Loyalty Filters," <I>The American 
- Economic Review, 73,</I> March, 1983: 54-63.</P>
-<P>Carter, John and Michael Irons. "Are Economists 
- Different, and If So, Why?" <I>Journal of Economic Perspectives, </I>5, 
- Spring, 1991. </P>
-<P>Carter, John and Michael Irons. "Are Economists 
- Different, and If So, Why?" (longer, unpublished version of the paper 
- above), College of the Holy Cross, Dec., 1990. </P>
-<P>Dawes, Robyn. "Social Dilemmas," <I>Annual Review of 
- Psychology, 31,</I> 1980: 163-93.</P>
-<P>Etzioni, Amitai. <I>The Moral Dimension: Toward a New 
- Economics, </I>NY: The Free Press, 1988.</P>
-<P>Frank, Robert H. <I>Passions Within Reason,</I> NY: W. 
- W. Norton, 1988.</P>
-<P>Frank, Robert H., Thomas Gilovich, and Dennis T. Regan, 
- "Can Cooperators Find One Another?" unpublished paper, 1992.</P>
-<P>Gilligan, Carol. <I>In a Different Voice,</I> 
- Cambridge, MA: Harvard University Press, 1982.</P>
-<P>Guth, Werner, Rolf Schmittberger, and Bernd Schwarze. 
- "An Experimental Analysis of Ultimatum Bargaining," <I>Journal of Economic 
- Behavior and Organization,</I> 3, 1982: 367-88.</P>
-<P>Hirshleifer, Jack. "On the Emotions as Guarantors of 
- Threats and Promises," in John Dupre, ed., <I>The Latest and the Best: 
- Essays on Evolution and Optimality,</I> Cambridge, MA: The MIT Press, 
- 1987.</P>
-<P>Kahneman, Daniel, Jack Knetsch, and Richard Thaler. 
- "Fairness and the Assumptions of Economics," <I>Journal of Business,</I> 
- 59, 1986: S286-S300.</P>
-<P>Mansbridge, Jane J. <I>Beyond Self-Interest,</I> 
- Chicago: University of Chicago Press, 1990.</P>
-<P>Marwell, Gerald and Ruth Ames. "Economists Free Ride, Does Anyone Else?" 
- <I>Journal of Public Economics,</I> 15 (1981): 295-310.</P>
-<P>Tullock, Gordon. <I>The Vote Motive,</I> London: Institute for Economic 
- Affairs, 1976.</P>
-</FONT>
-<STRONG><FONT FACE="Times"><P ALIGN=CENTER>Appendix 1: Whole Sample Probit 
- and Logit Models</P>
-</STRONG>
-</FONT>
-<FONT FACE="Times"><P><STRONG>Probit Model: </STRONG>Pr[own response    1 | X] 
   
- F(X</FONT><FONT FACE="Symbol">b</FONT><FONT FACE="Times">), where F is 
- the std. normal c.d.f.</P>
-<P>Observations: 207 Cases Correct: 150</P>
-<P>Log Likelihood: -114.96953 Avg. Likelihood: .57383787</P>
-<STRONG><P>Variable Coefficients.e.  t-ratio</P>
-</STRONG><P>constant .2546171    .3195718  .7967445</P>
-<P>unlimited -1.002759  .2312719  -4.335844</P>
-<P>intermediate-.2769906    .2439911  -1.135249</P>
-<P>limited   0.00------</P>
-<P>class -.2005716   0.09523010-2.106178</P>
-<P>sex.7184583   .1988373    3.613298</P>
-<P>econ .4831544   .24106652.004237</P>
-<P><STRONG>Logit Model: </STRONG>Pr[own response    1 | X]    
exp(X</FONT><FONT 
- FACE="Symbol">b</FONT><FONT FACE="Times">)/(1+exp(X</FONT><FONT 
- FACE="Symbol">b</FONT><FONT FACE="Times">))</P>
-<P>Observations: 207 Cases Correct: 150</P>
-<P>Log Likelihood: -114.82229 Avg. Likelihood: .57424621</P>
-<P><STRONG>Variable Coefficient    s.e.t-ratio </STRONG></P>
-<P>constant .4646459   .5381353  .8634368</P>
-<P>unlimited-1.696657  .3991972  -4.250174</P>
-<P>intermediate-.4859651   .4060518   -1.196806</P>
-<P>limited  0.00------</P>
-<P>class-.3469820   .1628891    -2.130173 </P>
-<P>sex1.196511 .33479733.573837</P>
-<P>econ .8411330.4056866 2.073357</P>
-</FONT>
-<FONT FACE="Times"><P ALIGN=CENTER><STRONG>Appendix 2: Ethics 
- Questionnaire</STRONG></P>
-<P>This questionnaire is part of an ongoing study of 
- attitudes toward ethical issues that arise in business and personal life. 
- Please read each question carefully and try to imagine yourself in the 
- situation it describes. Then check the most appropriate response category 
- for each question. </P>
-<P>_________________________________________________________________________ 
-_________</P>
-<STRONG><P>Question #1.</P>
-</STRONG><P>In an effort to increase productivity, the 
- owner of a small business has ordered ten personal computers for use by his 
- staff. When the UPS shipment arrives, he notices that the invoice from the 
- mail-order house bills for only nine PCs, even though all ten were included 
- with the shipment.</P>
-<P>The owner has two options. (1) He can inform the 
- mail-order house of its error and ask to be billed for the correct amount; 
- or (2) he can pay the amount shown on the invoice and take no further 
- action.</P>
-<P>If the owner pays the amount shown, the worst thing 
- that can happen is that the mail-order house may later discover its error 
- and bill him for the tenth computer. There is a high probability (0.99, 
- say) that the error will never be discovered.</P>
-<P>What do you believe the chances are that the owner 
- will inform the mail-order house of its mistake and ask to be billed for 
- the correct amount? (Check one.)</P>
-</FONT><P><IMG SRC="image14.jpg" WIDTH=477 HEIGHT=65></P>
-<FONT 
FACE="Times"><P>_________________________________________________________ 
-_________________________</P>
-<STRONG><P>Question #2</P>
-</STRONG><P>If YOU were the owner in the situation 
- described in Question # 1, what are the chances you would inform the 
- mail-order house of its mistake and ask to be billed for the correct 
- amount? (Check one.)</P>
-</FONT><P><IMG SRC="image14.jpg" WIDTH=477 HEIGHT=65></P>
-<FONT 
FACE="Times"><P>_________________________________________________________ 
-______________________(Please turn over)</P>
-<STRONG><P>Question # 3.</P>
-</STRONG>
-<P>After attending a football game, you return home to 
- discover that you have lost an envelope from your jacket pocket. The 
- envelope contains $100 in cash and has your name and address written on the 
- outside. A stranger has found the envelope.</P>
-<P>What would you say the chances are that this person 
- will return your $100 to you? (Check one.)</P>
-</FONT><P><IMG SRC="image14.jpg" WIDTH=477 HEIGHT=65></P>
-<FONT FACE="Times"><P 
->_________________________________________________________ 
-_________________________</P>
-<STRONG><P>Question # 4.</P>
-</STRONG>
-<P>If YOU found $100 in an envelope like the one 
- described in Question #3, what are the chances that you would return the 
- stranger's cash? (Check one.)</P>
-</FONT><P><IMG SRC="image14.jpg" WIDTH=477 HEIGHT=65></P>
-<FONT FACE="Times"><P 
->_________________________________________________________ 
-_________________________</P>
-<P>For each of the following, please check the category 
- that applies to you:</P>
-<P><STRONG>Sex:</STRONG> 
- male_____________female____________</P>
-<P><STRONG>Class:</STRONG> freshman________ 
- sophomore__________</P>
-<P>junior___________senior_____________other 
-_____________</P>
-<P>_________________________________________________________________________ 
-_________</P>
-<P>There will be a followup to this questionnaire in 
- December. In order to match the followup questionnaire with this one, we 
- need an identifying code for each of you, one that preserves your anonymity 
- and that you will be able to recall easily in December. Past experience has 
- taught that a code with these properties can be made from your middle name 
- and your mother's maiden name. </P>
-<P>Your middle name_____________________________________</P>
-<P>Your mother's maiden name______________________________ </P>
-<P>Thank you very much for your cooperation.</P>
-<P>_________________________________________________________ 
-___</P>
-</FONT>
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+<!--#include virtual="/server/header.html" -->
+<title>Does Studying Economics Inhibit Cooperation?</title>
+<!--#include virtual="/server/banner.html" -->
+<h2>Does Studying Economics Inhibit Cooperation?</h2>
+
+<p>by Robert H. Frank, Thomas Gilovich, and Dennis T. Regan</p>
+
+<p>In an essay written in 1879, Francis Amasa Walker tried to explain
+&ldquo;why economists tend to be in bad odor amongst real
+people.&rdquo; Walker, who went on to become the first president of
+the American Economic Association, argued that it was partly because
+economists disregard &ldquo;&hellip;the customs and beliefs that tie
+individuals to their occupations and locations and lead them to act in
+ways contrary to the predictions of economic theory.&rdquo;</p>
+
+<p>More than a century later, the general public continues to regard
+economists with suspicion.  This attitude stems in part from an
+apparent misunderstanding of economists' positions on important public
+policy issues.  For example, economists commonly advocate auctioning
+rights to discharge atmospheric pollutants to the highest bidders,
+leading critics to bemoan economists' &ldquo;shocking disregard for
+the environment and lack of compassion for the poor.&rdquo; What else,
+the critics ask, could enable them to support a program under which
+&ldquo;the rich can pollute to their heart's content?&rdquo; On closer
+examination, however, the economist's position is less hostile to the
+interests of the poor and the environment than it appears.  Indeed, as
+almost every economics student now knows, the effect of auctioning
+pollution rights is to concentrate the burden of pollution reduction
+in the hands not of the poor but of those people and firms who can
+reduce pollution at the lowest cost.  And this is an outcome that is
+clearly in the interests of all citizens, rich and poor alike.</p>
+
+<p>Misunderstandings of this sort aside, there remains another
+important source of public skepticism toward economics &mdash; namely,
+the perception that economics encourages people to act selfishly in
+pursuit of their own material interests.  In this paper, we examine
+the validity of this perception.</p>
+
+<h3>Economists and the Self-Interest Model</h3>
+
+<p>If pressed, most economists will concede that people sometimes care
+about more than just their own material well being.  Many have
+concerns for the welfare of other people, for esthetics, for their
+duties as citizens, and so on.</p>
+
+<p>Yet few economists include these broader concerns in their models
+of human behavior.  It may well be that the unpaid volunteer who heads
+the local United Way Campaign is driven purely by his concern for the
+disadvantaged; but economists feel on much firmer ground if they can
+identify some more narrowly self-interested motive for his action.
+And on inspection, there is at least some evidence in support of their
+cynicism.  When we examine the membership rolls of volunteer
+organizations, we find that insurance brokers, real estate agents, car
+dealers, chiropractors, and others with something to sell tend to be
+disproportionately represented.  Such organizations have less than
+their share of truck drivers and postal employees.</p>
+
+<p>The self-interest model has well established explanatory power.
+Whatever role love may play in the sustenance of marriage
+relationships, we know that divorce rates are higher in states that
+provide liberal welfare benefits.  When energy prices rise, people are
+more likely to form car pools and to insulate their houses.  When the
+opportunity cost of time rises, people have fewer children.  And so
+on.  From the economist's perspective, motives other than
+self-interest may matter, but they are peripheral to the main thrust
+of human endeavor, and we indulge them at our peril.  In Gordon
+Tullock's words, &ldquo;the average human being is about 95 percent
+selfish in the narrow sense of the term.&rdquo;</p>
+
+<p>From its base in economics, the self-interest model has made strong
+inroads into a variety of other disciplines.  Psychologists, political
+scientists, sociologists, philosophers, game theorists, biologists,
+and others rely increasingly on this model to explain and predict
+human behavior.</p>
+
+<p>The basic question we investigate in this paper is whether exposure
+to the self-interest model alters the extent to which people behave in
+self-interested ways.  The paper is organized into two parts.  In the
+first, we report the results of a series of empirical studies &mdash;
+some our own, some by other investigators &mdash; that support the
+hypothesis that economists behave in more self-interested ways.  By
+itself, this evidence does not demonstrate that exposure to the
+self-interest model is the <i>cause</i> of more self-interested
+behavior, although, as we will see, a case can be made for this
+proposition on a priori grounds.  An alternative interpretation is
+that economists may simply have been more self-interested to begin
+with, and this difference was one reason they chose to study
+economics.  In the second part of the paper, we present preliminary
+evidence that exposure to the self-interest model does in fact
+increase self-interested behavior.</p>
+
+<h4>I. Do Economists Behave Differently?</h4>
+<h5>A. The Free-Rider Experiments</h5>
+
+<p>One of the clearest predictions of the self-interest model is that
+people will tend to free-ride on the efforts of others when it comes
+to the provision of public or collective goods.  Even people who would
+strongly benefit from having, say, higher program quality on public TV
+have little incentive to contribute.  After all, any single
+individual's contribution is far too small to alter the likelihood of
+achieving the desired outcome.</p>
+
+<p>A study by Gerald Marwell and Ruth Ames found that students of
+economics are indeed much more likely to free-ride in experiments that
+called for private contributions to public goods.  Their basic
+experiment involved a group of subjects who were given an initial
+endowment of money, which they were to allocate between two accounts,
+one &ldquo;public,&rdquo; the other &ldquo;private.&rdquo; Money
+deposited in a subject's private account was returned dollar for
+dollar to the subject at the end of the experiment.  Money deposited
+in the public account was first pooled, then multiplied by some factor
+greater than one, and then distributed equally among all subjects.</p>
+
+<p>Under these circumstances, the socially optimal behavior is for
+each subject to put her entire endowment in the public account.  But
+the individually most advantageous strategy is to put all of it in the
+private account.  The self-interest model predicts that all subjects
+will follow the latter strategy.  Most don't.  Across eleven
+replications of the experiment, the average contribution to the public
+account was approximately 49 percent.</p>
+
+<p>It was only in a twelfth replication with first-year graduate
+students in economics as subjects that Marwell and Ames obtained
+results more nearly consistent with the self-interest model.  These
+subjects contributed an average of only 20 percent of their initial
+endowments to the public account, a figure significantly less than the
+corresponding figure for noneconomists (p&lt;.05).</p>
+
+<p>On completion of each replication of the experiment, Marwell and
+Ames asked their subjects two followup questions:</p>
+
+<ol>
+<li>What is a &ldquo;fair&rdquo; investment in the public good?</li>
+<li>Are you concerned about &ldquo;fairness&rdquo; in making your
+investment decision?</li>
+</ol>
+
+<p>In response to the first question, 75 percent of the noneconomists
+answered &ldquo;half or more&rdquo; of the endowment, and 25 percent
+answered &ldquo;all.&rdquo; In response to question 2, almost all
+noneconomists answered &ldquo;yes.&rdquo; The corresponding responses
+of the economics graduate students were much more difficult to
+summarize.  As Marwell and Ames wrote,</p>
+
+<blockquote>
+<p>&hellip; More than one-third of the economists either refused to
+answer the question regarding what is fair, or gave very complex,
+uncodable responses.  It seems that the meaning of
+&lsquo;fairness&rsquo; in this context was somewhat alien for this
+group.  Those who did respond were much more likely to say that little
+or no contribution was &lsquo;fair.&rsquo; In addition, the economics
+graduate students were about half as likely as other subjects to
+indicate that they were &lsquo;concerned with fairness&rsquo; in
+making their decisions.</p>
+</blockquote>
+
+<p>The Marwell and Ames study can be criticized on the grounds that
+their noneconomist control groups consisted of high school students
+and college undergraduates, who differ in a variety of ways from
+first-year graduate students in any discipline.  Perhaps the most
+obvious difference is age.  As we will see, however, criticism based
+on the age difference is blunted by our own evidence that older
+students generally give greater weight to social concerns like the
+ones that arise in free-rider experiments.  It remains possible,
+however, that more mature students might have had a more sophisticated
+understanding of the nuances and ambiguities inherent in concepts like
+fairness, and for that reason gave less easily coded responses to the
+followup questions.</p>
+
+<p>Yet another concern with the Marwell and Ames experiments is not
+easily dismissed.  Although the authors do not report the sex
+composition of their group of economics graduate students, such groups
+are almost always preponderantly male.  The authors' control groups of
+high school and undergraduate students, by contrast, consisted equally
+of males and females.  As our own evidence will later show, there is a
+sharp tendency for males to behave less cooperatively in experiments
+of this sort.  So while the Marwell and Ames findings are suggestive,
+they do not clearly establish that economists behave differently.</p>
+
+<h5>B. Economists and the Ultimatum Bargaining Game</h5>
+
+<p>The other major study of whether economists behave differently from
+members of other disciplines is by John Carter and Michael Irons
+(1991).  These authors measured the self-interestedness of economists
+by examining their behavior in the ultimatum bargaining game.  This is
+a simple game with two players, an &ldquo;allocator&rdquo; and a
+&ldquo;receiver.&rdquo; The allocator is given a sum of money (in
+these experiments, $10), and must then propose how to divide this sum
+between herself and the receiver.  Suppose, for example, the allocator
+proposes $X for herself, the remaining $(10-X) for the receiver.  Once
+the allocator makes this proposal, the receiver has two choices: (1)
+he may accept, in which case each player gets the amount proposed by
+the allocator; or (2) he may refuse, in which case each player gets
+zero.  The game is played only once by the same partners.</p>
+
+<p>If both players behave according to the self-interest model, the
+model makes an unequivocal prediction about how the game will proceed.
+Assuming the money cannot be divided into units smaller than one cent,
+the allocator will propose $9.99 for herself and the remaining $0.01
+for the receiver, and the receiver will accept on the grounds that a
+penny is better than nothing.  Since the game will not be repeated,
+there is no point in the receiver turning down a low offer in the hope
+of generating a better offer in the future.</p>
+
+<p>Other researchers have shown that the strategy predicted by the
+self-interest model is almost never followed in practice: 50-50 splits
+are the most common outcome, and most one-sided offers are rejected
+out of concerns about fairness.</p>
+
+<p>The research strategy employed by Carter and Irons was to compare
+the performance of economics majors and other students and see which
+group came closer to the predictions of the self-interest model.  In a
+sample of 43 economics majors, the average minimum amount acceptable
+by the receiver was $1.70, as compared with an average of $2.44 for a
+sample of 49 noneconomics majors (p&lt;.05).  As receivers then,
+economics majors came significantly closer than nonmajors to the
+behavior predicted by the self-interest model.</p>
+
+<p>In the allocator's role as well, economics majors performed more in
+accordance with the predictions of the self-interest model than did
+nonmajors.  Economics proposed to keep an average of $6.15 for
+themselves, as compared to an average of only $5.44 for the sample of
+49 nonmajors (p&lt;.01).</p>
+
+<p>Kahneman, Knetsch, and Thaler (1986) report findings similar to
+those of Carter and Irons: commerce students (the term used to
+describe business students in Canadian universities) were more likely
+than psychology students to make one-sided offers in ultimatum
+bargaining games.</p>
+
+<p>One difficulty with the Carter and Irons results is that the way
+they assigned the allocator and receiver roles leaves open possible
+differences in the interpretation of what behavior is required in the
+name of fairness.  In particular, allocators earned their role by
+having achieved higher scores on a preliminary word game.  Allocators
+might thus reason that they were entitled to a greater share of the
+surplus on the strength of their earlier performance.  The observed
+differences in the behavior of economics majors and nonmajors might
+therefore be ascribed to a differential tendency to attach
+significance to the earlier performance differences.  The training
+received by economics students in the marginal productivity theory of
+wages lends at least surface plausibility to this interpretation.</p>
+
+<p>To summarize the existing literature, both the Marwell and Ames and
+Carter and Irons papers provide evidence consistent with the
+hypothesis that economists tend to behave less cooperatively than
+noneconomists.  But because of the specific experimental design
+problems mentioned, neither study is conclusive.  In the following
+sections we describe our own attempts to test the hypothesis that
+economists behave less cooperatively.</p>
+
+<h5>C. Survey Data on Charitable Giving </h5>
+
+<p>The central role of the free-rider hypothesis in modern economic
+theory suggests that economists might be less likely than others to
+make gifts to private charities.  To explore this possibility, we
+mailed questionnaires to 1245 college professors randomly chosen from
+the professional directories of 23 disciplines, asking them to report
+the annual dollar amounts they gave to a variety of private charities.
+We received 576 responses with sufficient detail for inclusion in our
+study.  Respondents were grouped into the following disciplines:
+economics (N 75); other social sciences (N 106); math, computer
+science, and engineering (N 48); natural sciences (N 98); humanities
+(N 94); architecture, art, and music (N 68); and professional (N 87).
+Members of every discipline, even economics, fell far short of the
+prediction of the strong version of the free-rider hypothesis.  But
+the proportion of pure free riders among economists (that is, those
+who reported giving no money to any charity) was more than double that
+of any of the other six areas included in the survey.  (See Figure
+1.)</p>
+
+<p style="text-align: center">
+<img src="image1.jpg" width="465" height="199" alt="Figure 1" /><br />
+<strong>Figure 1. Proportion of Pure Free Riders in Seven Disciplines.
+</strong></p>
+
+<p>Although we do not have data on the gender of each survey
+respondent, gender differences by discipline do not appear to account
+for the pattern of free-ridership shown in Figure 1.  For example, the
+natural sciences, which are also preponderantly male, had only
+one-third as many free riders as did economics.</p>
+
+<p>Despite their generally higher incomes, economists were also among
+the least generous in terms of their median gifts to large charities
+like viewer-supported television and the United Way, which are shown
+in Figures 2 and 3, respectively.</p>
+
+<p style="text-align: center">
+<img src="image2.jpg" width="480" height="205" alt="Figure 2" /><br />
+<strong>Figure 2. Median Gift to Public Television.
+</strong></p>
+
+<p style="text-align: center">
+<img src="image3.jpg" width="488" height="201" alt="Figure 3" /><br />
+<strong>Figure 3. Median Gift to the United Way.
+</strong></p>
+
+<p>In fairness to the self-interest model, we should note that there
+may be self-interested reasons for contributing even in the case of
+charities like the United Way and public television.  United Way
+campaigns, for example, are usually organized in the workplace and
+there is often considerable social pressure to contribute.  Public
+television fund drives often make on-the-air announcements of donors'
+names and economists stand to benefit just as much as the members of
+any other discipline from being hailed as community-minded citizens.
+In the case of smaller, more personal charitable organizations, there
+are often even more compelling self-interested reasons for giving.
+After all, failure to contribute in accordance with one's financial
+ability may mean outright exclusion from the substantial private
+benefits associated with membership in religious groups, fraternal
+organizations, and the like.</p>
+
+<p>An examination of economists' gifts to other charities revealed
+that their median annual gift is actually slightly larger, in absolute
+terms, than the median for all disciplines taken as a whole.  But
+because economists have significantly higher salaries than do the
+members of most other disciplines, these data, like the data shown in
+Figures 2 and 3, tend to overstate the relative generosity of
+economists.  Unfortunately, we do not have direct income measures for
+the respondents in our survey, but we do have the number of years each
+respondent has been a practitioner in his or her discipline.  In an
+attempt to take income effects into account, we estimated earnings
+functions (salary vs. years of experience) for each discipline using
+data from a large private university.  We then applied the estimated
+coefficients from these earnings functions to the experience data from
+our survey to impute an income estimate for each respondent in our
+survey.  Finally, we used these imputed income figures, together with
+our respondents' reports of their total charitable giving to estimate
+the relationship between income and total giving shown in Figure 4.
+In the latter exercise, all economists were dropped from the sample on
+the grounds that our object was to see whether the giving pattern of
+economists deviates from the pattern we see for other disciplines.</p>
+
+<p>Thus, for example, in Figure 4 we see that a noneconomist with an
+annual income of $44,000 (roughly, the median imputed income for
+architects in our sample) is expected to give almost $900 per year to
+charity, while a noneconomist with an income of $62,000 (roughly the
+median imputed income for economists in our sample) is expected to
+give more than $1400 per year.</p>
+
+<p style="text-align: center">
+<img src="image4.jpg" width="451" height="284" alt="Figure 4" /><br />
+<strong>Figure 4. Charitable Giving vs. Imputed Income.
+</strong></p>
+
+<p>Using the relationship between charitable giving and income, we
+calculated the expected gift for each respondent as a function of his
+or her imputed income.  We then calculated our measure of a
+discipline's generosity as the ratio of the average value of gifts
+actually reported by members of the discipline to the average value of
+gifts expected on the basis of the members' imputed incomes.  A
+discipline is thus more generous than expected if this ratio exceeds
+1.0, and less generous if it is less than 1.0.  The computed ratio for
+economists was 0.91, which means that economists in our sample gave 91
+percent as much as they would have been expected to give on the basis
+of their imputed incomes.  The performance of economists by this
+measure is compared with the performance of other disciplines in
+Figure 5.</p>
+
+<p style="text-align: center">
+<img src="image5.jpg" width="472" height="198" alt="Figure 5" /><br />
+<strong>Figure 5. The Ratio of Average Gift to Gift Expected on the
+Basis of Income.
+</strong></p>
+
+<p>On a number of other dimensions covered in our survey, the behavior
+of economists was little different from the behavior of members of
+other disciplines.  For example, economists were only marginally less
+likely than members of other disciplines to report that they would
+take costly administrative action to prosecute a student suspected of
+cheating.  Economists were actually slightly above average for the
+entire sample in terms of the numbers of hours they reportedly spend
+in &ldquo;volunteer activities.&rdquo; In terms of their reported
+frequency of voting in presidential elections, economists were only
+slightly below the sample average.</p>
+
+<h5>D. Economists and the Prisoner's Dilemma</h5>
+
+<p>In this section we report our results from a large experimental
+study of how economics majors and nonmajors perform in the prisoner's
+dilemma game.</p>
+
+<p>Table 1 shows the monetary payoffs in dollars to two players, X and
+Y, in a standard prisoner's dilemma. In Table 1, as in all prisoner's
+dilemmas, each player gets a higher payoff when each cooperates than
+when each defects.  But when one player's strategy is fixed, the other
+player always gets a higher payoff by defecting than by cooperating;
+and hence the dilemma.  By following individual self-interest, each
+player does worse than if each had cooperated.</p>
+
+<p style="text-align: center">
+<img src="image6.jpg" width="280" height="231" alt="Table 1" /><br />
+<strong>Table 1. Monetary Payoffs for a Prisoner's Dilemma Game.
+</strong></p>
+
+<p>One of the most celebrated and controversial predictions of the
+self-interest model is that people will always defect in one-shot
+prisoner's dilemmas.  The game thus provides an opportunity to examine
+the extent to which various groups exhibit self-interested behavior.
+Accordingly, we conducted a large one-shot prisoner's dilemma
+experiment involving both economics majors and nonmajors.  Many of our
+subjects were students recruited from courses in which the prisoner's
+dilemma is an item on the syllabus.  Others were given a detailed
+briefing about the game.</p>
+
+<p>Our subjects met in groups of three and each was told that he would
+play the game once with each of the other two subjects.  The payoff
+matrix, shown in Table 1, was the same for each play of the game.
+Subjects were told that the games would be played for real money, and
+that none of the players would learn how their partners had responded
+in each play of the game.  (More below on how confidentiality was
+maintained.)</p>
+
+<p>Following a period in which subjects were given an opportunity to
+get to know one another, each subject was taken to a separate room and
+asked to fill out a form indicating his response (cooperate or defect)
+to each of the other two players in his group.  After the subjects had
+filled out their forms, the results were tallied and the payments
+disbursed.  Each subject received a single payment that was the sum of
+three separate amounts: (1) the payoff from the game with the first
+partner; (2) the payoff from the game with the second partner; and (3)
+a term that was drawn at random from a large list of positive and
+negative values.  None of these three elements could be observed
+separately, only their sum.</p>
+
+<p>The purpose of the random term was to make it impossible for a
+subject to infer from her total payment how any of the other subjects
+had played.  It prevented both the possibility of inferring individual
+choices and also of inferring even group patterns of choice.  Thus,
+unlike earlier prisoner's dilemma experiments, ours did not enable the
+subject to infer what happened even when each (or neither) of her
+partners defected.</p>
+
+<p>In one version of the experiment (the &ldquo;unlimited&rdquo;
+version), subjects were told that they could make promises not to
+defect, but they were also told that the anonymity of their responses
+would render such promises unenforceable.  In two other versions of
+the experiment (the &ldquo;intermediate&rdquo; and
+&ldquo;limited&rdquo; versions), subjects were not permitted to make
+promises about their strategies.  The latter two versions differed
+from one another in terms of the length of pre-game interaction, with
+up to 30 minutes permitted for the intermediate groups and no more
+than ten minutes for the limited groups.  All groups were given an
+extensive briefing on the prisoner's dilemma at the start of the
+experiment and each subject was required to complete a questionnaire
+at the end to verify that he or she had indeed understood the
+consequences of different combinations of choices.</p>
+
+<h6>Results for the Sample as a Whole</h6>
+
+<p>For the sample as a whole there were a total of 267 games, which
+means a total of 534 choices between cooperation and defection.  The
+choices for economics majors and nonmajors are shown in Figure 6,
+where we see that the defection rate for economics majors was 60.4
+percent, as compared to only 38.8 percent for nonmajors.</p>
+
+<p style="text-align: center">
+<img src="image7.jpg" width="364" height="263" alt="Figure 6" /><br />
+<strong>Figure 6. Defection and Cooperation Rates for the Sample as a
+Whole.
+</strong></p>
+
+<p>Needless to say, this pattern of differences is strongly supportive
+of the hypothesis that economics majors are more likely than nonmajors
+to behave self-interestedly (p&lt;.005).</p>
+
+<h6>Adding Control Variables</h6>
+
+<p>Earlier we noted that one possible explanation for the observed
+differences between economics students and others is that economics
+students are more likely than others to be male.  To control for the
+possible influences of sex, age, and experimental condition, we
+performed the ordinary least squares regression reported in Table 2.
+Because each subject played the game twice, the individual responses
+are not statistically independent.  To get around this problem, we
+limited our sample to the 207 subjects who either cooperated with, or
+defected on, each of their two partners.  The 60 subjects who
+cooperated with one partner and defected on the other were deleted
+from the sample.  The dependent variable is the subject's choice of
+strategy, coded as 0 for &ldquo;cooperate&rdquo; and 1 for
+&ldquo;defect.&rdquo; The independent variables are &ldquo;econ&rdquo;
+which takes the value 1 for economics majors, 0 for all others;
+&ldquo;unlimited,&rdquo; which is 1 for subjects in the unlimited
+version of the experiment, 0 for all others;
+&ldquo;intermediate,&rdquo; which is 1 for subjects in the
+intermediate version, 0 for all others; &ldquo;limited,&rdquo; which
+is the reference category; &ldquo;sex,&rdquo; coded as 1 for males, 0
+for females; and &ldquo;class,&rdquo; coded as 1 for freshmen, 2 for
+sophomores, 3 for juniors, and 4 for seniors.</p>
+
+<div style="text-align: center">
+<p><strong>Dependent variable:own response</strong></p>
+<p>R2 22.2% R2(adjusted) 20.3%</p>
+<p>s 0.4402 with 207 - 6 201 degrees of freedom</p>
+<p><strong>SourceSum of SquaresdfMean SquareF-ratio</strong></p>
+<p>Regression11.142652.22911.5</p>
+<p>Residual38.95402010.193801</p>
+<p><strong>VariableCoefficients.e.t-ratio</strong></p>
+<p>Constant0.5791270.10415.57</p>
+<p>econ0.1688350.07802.16</p>
+<p>unlimited0.00----</p>
+<p>intermediate-0.0911890.0806-1.13</p>
+<p>limited-0.3295720.0728-4.53</p>
+<p>sex0.2399440.06423.74</p>
+<p>class-0.0653630.0303-2.16</p>
+<p><strong>Table 2. Whole Sample Regression.</strong></p>
+</div>
+
+<p>Consistent with a variety of other findings on sex differences in
+cooperation, we estimate that, other factors the same, the probability
+of a male defecting is almost 0.24 higher than the corresponding
+probability for a female.  Even after controlling for the influence of
+gender, we see that the probability of an economics major defecting is
+almost 0.17 higher than the corresponding probability for a
+nonmajor.</p>
+
+<p>The coefficients for the unlimited and intermediate experimental
+categories represent effects relative to the defection rate for the
+limited category.  As expected, the defection rate is smaller in the
+intermediate category (where subjects have more time to interact than
+in the limited category), and falls sharply further in the unlimited
+category (where subjects are permitted to make promises to cooperate).
+With subjects' permission, we tape recorded the conversations of
+several of the unlimited groups, and invariably each person promised
+each of his partners he would cooperate.  (There would be little
+point, after all, in promising to defect.)</p>
+
+<p>Note, finally, that the overall defection rate declines
+significantly as students progress through school.  The class
+coefficient is interpreted to mean that with the passage of each year
+the probability of defection declines, on the average, by almost 0.07.
+This pattern will prove important when we take up the question of
+whether training in economics is the cause of higher defection rates
+for economics majors.</p>
+
+<h6>The Unlimited Subsample</h6>
+
+<p>Focusing on subjects in the unlimited subsample, we see in Figure 7
+that the difference between economics majors and nonmajors virtually
+disappears once subjects are permitted to make promises to cooperate.
+For this subsample, the defection rate for economics majors is 28.6
+percent, for nonmajors 25.9 percent.</p>
+
+<p style="text-align: center">
+<img src="image8.jpg" width="314" height="210" alt="Figure 7" /><br />
+<strong>Figure 7. The Unlimited Subsample (Promises Permitted).
+</strong></p>
+
+<h6>The Intermediate and Limited Subsamples</h6>
+
+<p>Because the higher defection rates for economics majors are largely
+attributable to the no-promises conditions of the experiment, the
+remainder of our analysis focuses on subjects in the limited and
+intermediate groups.  The conditions encountered by these groups are
+of special significance because they come closest to approximating the
+conditions that characterize social dilemmas encountered in practice.
+After all, people rarely have an opportunity to look one another in
+the eye and promise not to litter on deserted beaches or disconnect
+the smog control devices on their cars.</p>
+
+<p>In Figure 8 we report the choices for the pooled limited and
+intermediate groups.  Comparing the entries in Figure 8 with Figure 7,
+we see clear evidence of the higher defection rates of both economics
+majors and nonmajors.  The defection rates of 71.8 percent and 47.3
+percent for economics majors and nonmajors, respectively, differ
+significantly from one another at the .01 level.</p>
+
+<p style="text-align: center">
+<img src="image9.jpg" width="312" height="209" alt="Figure 8" /><br />
+<strong>Figure 8. Defection and Cooperation Rates for the No-Promises
+Subsample.
+</strong></p>
+
+<h6>Reasons for Cooperation and Defection</h6>
+
+<p>As part of the exit questionnaire that tested our subjects'
+understanding of the payoffs associated with different combinations of
+choices, we also asked them to state their reasons for making the
+choices they did.  We hypothesized that economists would be more
+inclined to construe the objective of the game in self-interested
+terms, and therefore more likely to refer exclusively to features of
+the game itself when describing reasons for their choices.  By
+contrast, we expected the noneconomists to be more open to alternative
+ways of interpreting the game, and thus more likely to look to their
+partners for cues about how to play.  Accordingly, we expected
+noneconomists to refer more often to their feelings about their
+partners, aspects of human nature, and so on.  This is precisely the
+pattern we found.  Among the sample of economics students, 31% made
+exclusive reference to features of the game itself in explaining their
+chosen strategies, as compared with only 17% of the noneconomists.
+The probability of obtaining such divergent responses by chance is
+less than .05.</p>
+
+<p>Another possible explanation for the economists' higher defection
+rates is that economists may be more likely than others to expect
+their partners to defect.  The self-interest model, after all,
+encourages such an expectation, and we know from other experiments
+that most subjects defect if they are told that their partners are
+going to defect.  To investigate the role of expectations, we asked
+students in an upper division public finance course in Cornell's
+economics department whether they would cooperate or defect in a
+one-shot prisoner's dilemma if they knew <i>with certainty</i> that
+their partner was going to cooperate.  Most of these students were
+economics majors in their junior and senior years.  Of the 31 students
+returning our questionnaires, 18 (58 percent) reported that they would
+defect, only 13 that they would cooperate.  By contrast, just 34
+percent (14 of 41) noneconomics Cornell undergraduates who were given
+the same questionnaire reported that they would defect on a partner
+they knew would cooperate (p&lt;.05).  For the same two groups of
+subjects, almost all respondents (30 of 31 economics students and 36
+of 41 noneconomics students) said they would defect if they knew their
+partner would defect.  From these responses, we conclude that while
+expectations of partner performance do indeed play a strong role in
+predicting behavior, defection rates would remain significantly higher
+for economists than for noneconomists even if both groups held
+identical expectations about partner performance.</p>
+
+<h4>II. Why Do Economists Behave Differently?</h4>
+
+<p>In the preceding sections we have seen evidence that economists
+behave less cooperatively than noneconomists along a variety of
+different dimensions.  This difference in behavior might be
+exclusively the result of training in economics.  Alternatively, it
+might exist simply because people who chose to major in economics were
+different initially.  Or it might be some combination of these two
+effects.  We now report evidence on whether training in economics
+plays a causal role.</p>
+
+<h5>A. Comparing Upperclassmen and Underclassmen</h5>
+
+<p>If economics training plays a causal role in uncooperative
+behavior, then we would expect defection rates in the prisoner's
+dilemma experiments to rise with exposure to training in economics.
+Again focusing on the no-promises subsample, the defection rates are
+broken down by major and level of education in Figure 9.  As shown,
+the defection rate for economics majors is virtually the same for both
+upperclassmen (juniors and seniors) and underclassmen (freshmen and
+sophomores).  By contrast, the defection rate for nonmajors is
+approximately 33 percent higher for underclassmen than for
+upperclassmen.</p>
+
+<p style="text-align: center">
+<img src="image10.jpg" width="403" height="275" alt="Figure 9" /><br />
+<strong>Figure 9. Defection Rates for Upper- and Underclassmen.
+</strong></p>
+
+<p>The pattern shown in Figure 9 continues to hold when we control for
+the effects of other factors that influence defection rates.  As the
+regression equation summarized in Table 3 shows, the defection
+probabilities do not differ significantly between upperclass economics
+majors and underclass economics majors.  For nonmajors, defection
+probabilities are sharply lower than for majors in each category, and
+fall by more than 0.16 with the transition to upperclass status.</p>
+
+<div style="text-align: center">
+<p><strong>Dependent variable:own response </strong></p>
+<p>R2 16.4%% R2(adjusted) 12.8%</p>
+<p>s 0.4673 with 124 - 6 118 degrees of freedom</p>
+<p><strong>SourceSum of SquaresdfMean SquareF-ratio</strong></p>
+<p>Regression5.0359951.00724.61</p>
+<p>Residual25.76241180.218325</p>
+<p><strong>VariableCoefficients.e.t-ratio</strong></p>
+<p>Constant0.6287340.1436 4.38</p>
+<p>limited0.00----</p>
+<p>intermediate-0.0950400.0876-1.09</p>
+<p>sex0.2575380.08962.88</p>
+<p>econ 1,20.00----</p>
+<p>econ 3,4-0.0269360.1623 -0.166</p>
+<p>nonecon 1,2-0.1510500.1426-1.06</p>
+<p>nonecon 3,4-0.3132660.1427-2.20</p>
+<p><strong>Table 3. The Effect of Education Level on Defection
+Rates.</strong></p>
+</div>
+
+<p>Thus, for students in general there is a pronounced tendency toward
+more cooperative behavior with movement toward graduation, a trend
+that is conspicuously absent for economics majors.  On the basis of
+the available evidence, we are in no position to say whether the trend
+for noneconomists reflects something about the content of noneconomics
+courses.  But regardless of the causes of this trend, the fact that it
+is not present for economists is consistent with the hypothesis that
+training in economics plays at least some causal role in the lower
+observed cooperation rates of economists.</p>
+
+<h5>B. Honesty Surveys</h5>
+
+<p>In a further attempt to assess whether training in economics
+inhibits cooperation in social dilemmas, we posed a pair of ethical
+dilemmas to students in two introductory microeconomics courses at
+Cornell University and to a control group of students in an
+introductory astronomy course, also at Cornell.  In one dilemma, the
+owner of a small business is shipped ten microcomputers but is billed
+for only nine and the question is whether the owner will inform the
+computer company of the error.  Subjects are first asked to estimate
+the chances (0 - 100%) that the owner would point out the mistake, and
+then, on the same response scale, to indicate how likely <i>they</i>
+would be to point out the error if they were the owner.  The second
+dilemma concerns whether a lost envelope containing $100 and bearing
+the owner's name and address is likely to be returned by the person
+who finds it.  Subjects are first asked to imagine that they have lost
+the envelope and to estimate the likelihood that a stranger would
+return it.  They are then asked to assume that the roles are reversed
+and to indicate the chances that they would return the money to a
+stranger.</p>
+
+<p>Students in each class completed the questionnaire on two
+occasions, first during the initial week of class in September, and
+then during the final week of class in December.</p>
+
+<p>For each of the four questions, each student was coded as being
+&ldquo;more honest&rdquo; if the probability checked for that question
+rose between September and December; &ldquo;less honest&rdquo; if it
+fell during that period; and &ldquo;no change&rdquo; if it remained
+the same.  Our hypothesis was that even a single semester of
+introductory microeconomics would have a measurable effect both on
+students' expectations of the level of self-interested behavior in
+society and on their own propensities to behave self-interestedly.</p>
+
+<p>The first introductory microeconomics instructor (instructor A)
+whose students we surveyed is a mainstream economist with research
+interests in industrial organization and game theory.  In class
+lectures, this instructor placed heavy emphasis on the prisoner's
+dilemma and related illustrations of how survival imperatives often
+militate against cooperation.  The second microeconomics instructor
+(instructor B) is a specialist in economic development in Maoist China
+who did not emphasize such material to the same degree, but did assign
+a mainstream introductory text.  On the basis of these differences,
+our expectation was that any observed effects of economics training
+should be stronger in instructor A's class than in instructor B's.
+The results for the three classes are summarized in Figures 10-12.</p>
+
+<p style="text-align: center"><strong>Introductory Microeconomics A (N
+48)</strong></p>
+<p style="text-align: center">
+<img src="image11.jpg" width="421" height="266" alt="Figure 10" /><br />
+<strong>Figure 10. Questionnaire Findings, Introductory Microeconomics
+A.
+</strong></p>
+
+<p style="text-align: center"><strong>Introductory Microeconomics B (N
+115)</strong></p>
+<p style="text-align: center">
+<img src="image12.jpg" width="423" height="243" alt="Figure 11" /><br />
+<strong>Figure 10. Questionnaire Findings, Introductory Microeconomics
+B.
+</strong></p>
+
+<p style="text-align: center"><strong>Introduction to Astronomy (N
+30)</strong></p>
+<p style="text-align: center">
+<img src="image13.jpg" width="422" height="244" alt="Figure 12" /><br />
+<strong>Figure 12. Questionnaire Findings: Introduction to Astronomy.
+</strong></p>
+
+<p>As Figures 10 and 11 indicate, a tendency toward more cynical
+responses was observed in instructor A's introductory economics class
+but not in instructor B's.  In our control group of introductory
+astronomy students (Figure 12), there was a weak tendency toward less
+cynical expectations and behavior over the course of the semester.</p>
+
+<p>It may seem natural to wonder whether the differences reflected in
+Figures 10 and 11 might stem in part from the fact that students chose
+their instructors rather than being randomly assigned.  Perhaps the
+ideological reputations of the two professors were known in advance to
+many students, with the result that a disproportionate number of the
+least cynical students chose to take instructor B's course.  Two
+observations, however, weigh heavily against this interpretation.
+First, the average values of the initial responses to the four
+questions were in fact virtually the same for both classes.  And
+second, note that Figures 10 and 11 record not the <i>level</i> of
+cynicism but the <i>change</i> in that level between the beginning and
+end of the course.  Figure 11 thus tells us that even if the students
+in Microeconomics A were more cynical to begin with, they became still
+more so during the course of the semester.  This finding is consistent
+with the hypothesis that emphasis on the self-interest model tends to
+inhibit cooperation.</p>
+
+<h3>Discussion</h3>
+
+<p>There have been several previous attempts to discover whether
+economists behave in more self-interested ways than do noneconomists.
+The Marwell and Ames finding of a greater tendency to free ride on the
+part of economists is uncertain because their samples of economists
+and noneconomists were different on so many dimensions other than
+academic history and interests.  The Carter and Irons findings on the
+ultimatum bargaining game were subject to an alternative
+interpretation based on the possibility that economics majors may have
+held different views on how performance in the preliminary word game
+affected entitlements in the ultimatum game.</p>
+
+<p>We believe our prisoner's dilemma results constitute the clearest
+demonstration to date of a large difference in the extent to which
+economists and noneconomists behave self-interestedly.  And our survey
+of charitable giving lends additional support to the hypothesis that
+economists are more likely than others to free ride.</p>
+
+<p>But we also emphasize that both of these exercises produced
+evidence that economists behave in traditionally communitarian ways
+under at least some circumstances.  For example, they reported
+spending as much time as others in volunteer activities, and their
+total gifts to charity were only slightly less than would have been
+expected on the basis of their incomes.  Finally, in the unlimited
+version of our prisoner's dilemma experiments, where subjects were
+allowed to promise to cooperate, economists were almost as likely to
+cooperate as noneconomists were.</p>
+
+<p>We also found evidence consistent with the view that the
+differences in cooperativeness are caused in part by training in
+economics.  First, we saw that the gap in defection rates between
+economics majors and nonmajors tends to widen as students move toward
+graduation.  Second, we saw that introductory microeconomics, at least
+if taught in a certain way, seems to affect student attitudes toward
+honesty.</p>
+
+<p>Clearly, our evidence for the existence of a difference between the
+behavior of economists and noneconomists is more compelling than our
+evidence for the causal role of economics training in creating that
+difference.  But there is additional indirect evidence for such a
+role.  One of the clearest patterns to emerge in several decades of
+experimental research on the prisoner's dilemma is that the behavior
+of any given player is strongly influenced by that player's prediction
+about what his partner will do.  In experiments involving
+noneconomists, people who expect their partners to cooperate usually
+cooperate themselves, and those who expect their partners to defect
+almost always defect.  In our experiments, economists were 42 percent
+more likely than noneconomists to predict that their partners would
+defect.  It would be remarkable indeed if none of this difference in
+outlook were the result of repeated exposure to a behavioral model
+whose unequivocal prediction is that people will defect whenever
+self-interest dictates.</p>
+
+<p>For the sake of discussion, suppose that exposure to the
+self-interest model does, in fact, cause people to behave more
+selfishly.  Should this be a cause for concern?  To the extent that
+norms favoring cooperation help solve prisoner's dilemmas and other
+market failures, one cost of a rise in selfish behavior is a fall in
+the real value of economic output.  Who bears this cost?  By
+conventional accounts, it is those who continue to behave
+cooperatively, a troubling outcome on equity grounds.  Several
+researchers have recently suggested, however, that the ultimate
+victims of noncooperative behavior may be the very people who practice
+it.  Suppose, for example, that some people always cooperate in
+one-shot prisoner's dilemmas while others always follow the seemingly
+dominant strategy of defecting.  If people are free to interact with
+others of their own choosing, and if there are cues that distinguish
+cooperators from defectors, then cooperators will interact selectively
+with one another and earn higher payoffs than defectors.  Elsewhere we
+have shown that even on the basis of brief encounters involving
+strangers, experimental subjects are adept at predicting who will
+cooperate and who will defect in prisoner's dilemma games.  If people
+are even better at predicting the behavior of people they know well,
+it seems that the direct pursuit of material self-interest may indeed
+often be self-defeating.</p>
+
+<p>These observations do not challenge the obvious importance of
+self-interest as a human motive.  But they do suggest the need for a
+richer model of 20human behavior, one that explicitly recognizes that
+people who hold cooperative motives often come out ahead.</p>
+
+<h3>References</h3>
+<p>Akerlof, George.  &ldquo;Loyalty Filters,&rdquo; <i>The American
+Economic Review, 73,</i> March, 1983: 54-63.</p>
+<p>Carter, John and Michael Irons.  &ldquo;Are Economists Different,
+and If So, Why?&rdquo; <i>Journal of Economic Perspectives,</i> 5,
+Spring, 1991.</p>
+<p>Carter, John and Michael Irons.  &ldquo;Are Economists Different,
+and If So, Why?&rdquo; (longer, unpublished version of the paper
+above), College of the Holy Cross, Dec., 1990.</p>
+<p>Dawes, Robyn.  &ldquo;Social Dilemmas,&rdquo; <i>Annual Review of
+Psychology, 31,</i> 1980: 163-93.</p>
+<p>Etzioni, Amitai.  <i>The Moral Dimension: Toward a New
+ Economics,</i> NY: The Free Press, 1988.</p>
+<p>Frank, Robert H.  <i>Passions Within Reason,</i> NY: W. W. Norton,
+1988.</p>
+<p>Frank, Robert H., Thomas Gilovich, and Dennis T. Regan, &ldquo;Can
+Cooperators Find One Another?&rdquo; unpublished paper, 1992.</p>
+<p>Gilligan, Carol.  <i>In a Different Voice,</i> Cambridge, MA:
+Harvard University Press, 1982.</p>
+<p>Guth, Werner, Rolf Schmittberger, and Bernd Schwarze.  &ldquo;An
+Experimental Analysis of Ultimatum Bargaining,&rdquo; <i>Journal of
+Economic Behavior and Organization,</i> 3, 1982: 367-88.</p>
+<p>Hirshleifer, Jack.  &ldquo;On the Emotions as Guarantors of Threats
+and Promises,&rdquo; in John Dupre, ed., <i>The Latest and the Best:
+Essays on Evolution and Optimality,</i> Cambridge, MA: The MIT Press,
+1987.</p>
+<p>Kahneman, Daniel, Jack Knetsch, and Richard Thaler.
+&ldquo;Fairness and the Assumptions of Economics,&rdquo; <i>Journal of
+Business,</i> 59, 1986: S286-S300.</p>
+<p>Mansbridge, Jane J.  <i>Beyond Self-Interest,</i> Chicago:
+University of Chicago Press, 1990.</p>
+<p>Marwell, Gerald and Ruth Ames.  &ldquo;Economists Free Ride, Does
+Anyone Else?&rdquo; <i>Journal of Public Economics,</i> 15 (1981):
+295-310.</p>
+<p>Tullock, Gordon.  <i>The Vote Motive,</i> London: Institute for
+Economic Affairs, 1976.</p>
+
+<h3>Appendix 1: Whole Sample Probit and Logit Models</h3>
+
+<p><strong>Probit Model:</strong> Pr[own response 1 | X]
+F(X<tt>b</tt>), where F is the std. normal c.d.f.</p>
+<p>Observations: 207 Cases Correct: 150</p>
+<p>Log Likelihood: -114.96953 Avg. Likelihood: .57383787</p>
+<p><strong>Variable Coefficients.e. t-ratio</strong></p>
+<p>constant .2546171    .3195718  .7967445</p>
+<p>unlimited -1.002759  .2312719  -4.335844</p>
+<p>intermediate-.2769906    .2439911  -1.135249</p>
+<p>limited   0.00------</p>
+<p>class -.2005716   0.09523010-2.106178</p>
+<p>sex.7184583   .1988373    3.613298</p>
+<p>econ .4831544   .24106652.004237</p>
+<p><strong>Logit Model:</strong> Pr[own response 1 | X]
+exp(X<tt>b</tt>)/(1+exp(X<tt>b</tt>))</p>
+<p>Observations: 207 Cases Correct: 150</p>
+<p>Log Likelihood: -114.82229 Avg. Likelihood: .57424621</p>
+<p><strong>Variable Coefficient s.e.t-ratio </strong></p>
+<p>constant .4646459   .5381353  .8634368</p>
+<p>unlimited-1.696657  .3991972  -4.250174</p>
+<p>intermediate-.4859651   .4060518   -1.196806</p>
+<p>limited  0.00------</p>
+<p>class-.3469820   .1628891    -2.130173 </p>
+<p>sex1.196511 .33479733.573837</p>
+<p>econ .8411330.4056866 2.073357</p>
+
+<h3>Appendix 2: Ethics Questionnaire</h3>
+
+<p>This questionnaire is part of an ongoing study of attitudes toward
+ethical issues that arise in business and personal life.  Please read
+each question carefully and try to imagine yourself in the situation
+it describes.  Then check the most appropriate response category for
+each question.</p>
+
+<p>______________________________________________________________________</p>
+
+<p><strong>Question #1.</strong></p>
+
+<p>In an effort to increase productivity, the owner of a small
+business has ordered ten personal computers for use by his staff.
+When the UPS shipment arrives, he notices that the invoice from the
+mail-order house bills for only nine PCs, even though all ten were
+included with the shipment.</p>
+
+<p>The owner has two options. (1) He can inform the mail-order house
+of its error and ask to be billed for the correct amount; or (2) he
+can pay the amount shown on the invoice and take no further
+action.</p>
+
+<p>If the owner pays the amount shown, the worst thing that can happen
+is that the mail-order house may later discover its error and bill him
+for the tenth computer.  There is a high probability (0.99, say) that
+the error will never be discovered.</p>
+
+<p>What do you believe the chances are that the owner will inform the
+mail-order house of its mistake and ask to be billed for the correct
+amount?  (Check one.)</p>
+
+<p><img src="image14.jpg" width="477" height="65" alt="" /></p>
+<p>_____________________________________________________________________</p>
+
+<p><strong>Question #2.</strong></p>
+
+<p>If YOU were the owner in the situation described in Question #1,
+what are the chances you would inform the mail-order house of its
+mistake and ask to be billed for the correct amount?  (Check one.)</p>
+
+<p><img src="image14.jpg" width="477" height="65" alt="" /></p>
+<p>_____________________________________________________________(Please
+turn over)</p>
+
+<p><strong>Question #3.</strong></p>
+
+<p>After attending a football game, you return home to discover that
+you have lost an envelope from your jacket pocket.  The envelope
+contains $100 in cash and has your name and address written on the
+outside.  A stranger has found the envelope.</p>
+<p>What would you say the chances are that this person will return
+your $100 to you?  (Check one.)</p>
+
+<p><img src="image14.jpg" width="477" height="65" alt="" /></p>
+<p>_____________________________________________________________________</p>
+
+<p><strong>Question #4.</strong></p>
+
+<p>If YOU found $100 in an envelope like the one described in Question
+#3, what are the chances that you would return the stranger's cash?
+(Check one.)</p>
+
+<p><img src="image14.jpg" width="477" height="65" alt="" /></p>
+<p>_____________________________________________________________________</p>
+
+<p>For each of the following, please check the category that applies
+to you:</p>
+<p><strong>Sex:</strong> male_____________female____________</p>
+<p><strong>Class:</strong> freshman________ sophomore__________</p>
+<p>junior___________senior_____________other _____________</p>
+<p>_____________________________________________________________________</p>
+
+<p>There will be a followup to this questionnaire in December.  In
+order to match the followup questionnaire with this one, we need an
+identifying code for each of you, one that preserves your anonymity
+and that you will be able to recall easily in December.  Past
+experience has taught that a code with these properties can be made
+from your middle name and your mother's maiden name.</p>
+
+<p>Your middle name_____________________________________</p>
+<p>Your mother's maiden name______________________________</p>
+<p>Thank you very much for your cooperation.</p>
+<p>_____________________________________________________________________</p>
+
+</div>
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+Copyright &copy; 1999, 2008 Free Software Foundation, Inc.,</p>
+<address>51 Franklin St, Fifth Floor, Boston, MA 02110, USA</address>
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+Verbatim copying and distribution of this entire article is permitted
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