Economists: selfish bastards

In the course of researching my next novel, I happened upon this old paper by Robert H. Frank, Thomas Gilovich, and Dennis T. Regan, "Does Studying Economics Inhibit Cooperation?" Its conclusions: Economics grad students are more likely to free ride than the general public. Economists are less generous than other academics in charitable giving. Economics undergrads are more likely to defect in prisoner's dilemma problems. Students are less likely to return found money after studying economics but not after studying another subject like astronomy. No wonder they call it "the dismal science."
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.

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.

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.05).

Does Studying Economics Inhibit Cooperation?


  1. Interesting, but correlation vs causality? Looking at the setup of the experiment, I wonder whether it would be fair to suggest that “Selfish bastards are more likely to study economics” is a more fitting conclusion than “Studying economics is likely to make you a selfish bastard”?

  2. Read the rest of the paper — they show progressively increasing levels of selfishness as economists go from undergrads to grads to profs.

  3. You could say they function as expected (by older economists). Is the demand for economists higher today than, say, in the 70s? I was under the impression that their jobs are a litlle safer.

  4. Maybe because once they have a better idea of how economic system works, and of the statistics involved, they realize they can get away with much more.

    (No, I haven’t read the link, it was just an offhand idea)

  5. They have come to believe their own assumptions – self-fulfilling prophets.
    Political economists are better than what passes for economists today, with there “man is a selfish animal” dogma.
    We are social creatures first foremost and always. To say that self-interest rules is to project their own…never mind.

  6. Glyph:
    As the students progressed through their schooling (and presumably thought more and more like economists), their scores diverged more and more from the general population towards more selfish, non-cooperating behaviour.

    Professor Robert Frank had been interviewed on CBC Radio’s Quirks and Quarks in April ’94.
    “Selfish Economists: Dr. Robert Frank: New research shows that economic students are more selfish than others.” (Unfortunately, they don’t list an archived recording of that show – it was before podcasting was invented.)

    When Q&Q’s host Bob MacDonald asked him: “So, what is the implications of this finding?” (I’m not quoting here…):
    – Suppose you’ve got 20 litres of some toxic chemicals to dispose of. As a regular person, you will drive across town and bring it to the toxic waste disposal site. Your cost: $10, for gas and wear and tear on the car.
    If you’re an economist, you’ll think “If I pour this down the drain, it’ll cost the city $300,000 to clean it up. $300,000 divided by 3 million people in this city: my cost: $0.10. I pour it down the drain.”

    When an economist says such and such a policy is good, (s)he really means “it’s good for me”.

  7. Not a lot of love for economists here!

    One of my best friends is an economist and I’d put him as a lot more socially-conscious than the average person. Hardly a representative sample I know, but let’s not over-generalise.

    As a philosophy graduate myself, I’ve ran the Prisoner’s Dilemma scenario with him a few times. What I will say is this; in the knowledge that it’s only a game, he did seem more likely to make the self-serving choice, perhaps because he wanted to ‘win’ the game whilt knowing that it would not actually condemn his partner to death in this instance. I’ve no doubt were I actually in a cell with him I could trust him to do the right thing.

    In theory, there’s no difference between theory and practice – but in practise there is.

  8. Why should this be any less surprising than biologists tending to be atheists?

    Everyone knows that our culture indoctrinates us with warm fuzzy bullshit. Studying something lets you find out just how deep that bullshit is.

    I wonder what the results would be in the pooled money experiment if the participants were all economists, and they all knew it? Would knowing that those you’re cooperating with aren’t stupid and see through the game make them more likely to trust each other, or less?

  9. As someone who’s spent a lot of his professional life at the University of Chicago, which has a renowned business school (Milton Friedman and a lot of Nobel winners), I can tell you:

    It’s all true. Economists are uniquely horrible people.

  10. What makes me laugh a little though is that, for once, the economists get caught into the same net of statistical tools that they throw upon everyone, all the time, and that they suffer the consequences of the same kind of abusive generalizations that they are making themselves, by profession.

    Them and all the ‘economists haters’ here are in the same boat: right on the whole and wrong in every detail.


  11. Gives me a warm fuzzy feeling actually having majored in Econ when I was in college.

    Finally something that explains all the leeches in the classes I took!

  12. While there’s no excuse for not returning someone else’s property, the some of the other bits may be quite desirable. For example, being less likely to donate to charity might be a result of actually learning that most charities accomplish little, and do so in a tremendously inefficient manner (I do not assert that this is true – merely that if it was true, and if economists learned it, then it would be actively smart for economists to be more picky about donating money).

  13. Everybody-

    so much hate. Unbelievable. I did study Economics. Micro-Economics to be specific, which is the analysis of micro-level decisions (e.g., buying decisions of persons, market entry or pricing decisions of managers, labour supply and demand analysis) as opposed to macro-level decisions (e.g., economic policy, money supply by the fed).

    My self-perception might differ from my self-actuality, but most people I met were geeky mathematicians. We always thought the morally questionable characters were in the class next door doing their MBAs. Enough blame.

    Anyway, I do not want to defend anybody here or get into that nurture/nature debate (or positive self-selection as Economists call it).
    I did notice that my fellow commentators blame Economists for behaving unfair and unjust. Interestingly that is one major stream of research in Economics. Advanced thoughts, which question the ultima ratio of the Homo Oeconomicus (aka Homo Economicus), the guy who makes fully rational decisions and who only maximises his own utility function and thus behaves like a jerk.

    Classics are Kahneman/Tversky for their work why people are behaving non-rational and which biases and heuristics we use to make decisions. Nobel Prize for them.

    Selten (another Nobel Prize winner) for instance did great research on experimental Game Theory. He asked different people (always 2) around the world to play a simple game (called Ultimatum Game): I give you 100 $/EUR/Yen/whatever and you split the money between the two of you. The first player makes a proposal on how to split the money, in turn the second player decides whether to accept the proposal or not. If he accepts, you split as proposed and keep the money, if he turns down the offer I get my money back and you get nothing.
    The ‘Homo Oeconomicus’ would offer the other player the minimal amount, the second player would accept, since he knows a little is better than nothing. In reality most Western cultures split 70-30, some 50-50. On average player 2 turns down 40%-60% of all proposals if he/she is offered 20%. Some tribal societies on Oceania are more selfish and split less than 80-20.
    [just search for “ultimatum game experimental” in Google Scholar and start reading]

    This is only a small part, but Economics is a young profession and a lot of recent research is devoted to understand society acceptance, fairness, norms. Thus Economists are not blind to justice and fairness and society.

    As my professor always put it: “The value of Economics is to show that a simple idea get’s quickly complex, even beyond the ability to solve it. The value of business administration has yet to be found, since it clearly does not produce the perfect manager.”

    Plus there are the big thinkers like Marx who thought about justice on a macro-economic scale.

    Just wanted to spark some thoughts here.

  14. First, simply because a greater percent of graduate students display more selfish tendencies doesn’t mean that studying economics makes people more selfish. Because the results are giving in percentages and not following a particular student through school, it is still possible that selfish people gravitate towards economics and even more selfish people decide to go pursue a graduate economic degree.

    Second, after reading the paper I have to agree with Beard of Bees, enough time in economics is devoted to studying prisoner’s dilemmas that it isn’t surprising they choose to defect based on what they’ve learned in a game setting. The other measures are based on economics professors, who are all without a doubt crazy, and not graduates.

    Though, for full disclosure I’m an economist and I’m trying to defend them out of purely selfish reasons.

  15. 0xdeadbeef: Everyone knows that our culture indoctrinates us with warm fuzzy bullshit. Studying something lets you find out just how deep that bullshit is. I wonder what the results would be in the pooled money experiment if the participants were all economists, and they all knew it? Would knowing that those you’re cooperating with aren’t stupid and see through the game make them more likely to trust each other, or less?

    I suspect the reason for the tendency in the article is that Economics traditionally has neglected the costs associated with information acquisition. In particular, the pure self-interest model of the Ultimatum Bargaining Game neglects the effects of signaling societal membership, which normally signals willingness to co-operate and share resources. I think what is being measured is the degree to which Economists more strongly identify on reflex as selfish bastards than members of a society, together with the cost of effort for making the decision.

    What 0xDEADBEEF call “bullshit” is part of the ongoing investment requirements of the co-operative venture known as “society”, which usually has a better return on those investments than simple alternatives.

  16. While the fact that people become steadily more selfish as they continue to study economics, that alone does not exclude the possibility that this is correlation, not causation.

    One can make a perfectly rational argument that one’s innate disposition tends to harden and become more concrete as one matures, and once you’ve freed yourself from the burden of fuzzy parents and fuzzy liberal college peers, you’re finally able to work in an environment filled only with selfish old coots like yourself.

    Not that this is so, but the possibility isn’t excluded.

    A better study would look at people who were forced into taking economics against their choice, or people who weren’t able to take economics even though they wanted to. (That would be an ok replacement for an impossible study, which would be to randomly assign students to different majors and careers…)

  17. #19, Gweran:

    simply because a greater percent of graduate students display more selfish tendencies doesn’t mean that studying economics makes people more selfish

    This was also my first thought after reading the summary. However, the researchers studied students’ honesty before and after three classes; two in economics, and one in astronomy (fig 10-12 in the text).

    They found that the students’ honesty was negatively influenced by an economics class led by a professor who stressed how “survival imperatives often militate against cooperation”.

    They refute the suggestion that less honest students may have chosen this class; levels of honesty were equal across all three classes at the start of the study.

    As someone used to picking holes in statistical papers, I’d say that this one is admirably rigorous.

  18. Two-fold question…

    1. Are these economists merely modeling (perhaps at an extreme) a broader pattern of increased selfishness through time?

    2. Is it that economics trains selfishness or that it attracts the selfish? If it’s the former, that’s a very exciting prospect for social engineering in all its forms. If it’s the latter, that’s an attractive prospect for containing society’s selfish.

  19. There is a fundamental flaw in the assumption that not giving money to the public fund is selfish. It doesn’t take into consideration the intent behind keeping the money. For instance, there are people in the world like Warren Buffet who have been very focused on keeping his or her money so that when they die, they can then give it to charity. They do this because they are rightfully certain that they can turn whatever amount of money they have into a much larger amount of money, before the die, which will do more good than if they simply turned that money over to an inefficient charity or government. Or what about someone who would keep the money to invest into his or her business, which then would be able to employ more people? Those employees would then be able to feed their families. In my view it shows that economists dislike unconditional handouts. Everyone should dislike unconditional handouts.

  20. Those who study economics learn that individuals pursuing their separate interests is what makes the world go ’round. In their view, it’s not “selfish”, as they’d prefer everyone act similarly. They are also more aware of the atrocious spending habits in public funds, much of which is outright bureaucratic thievery.

    What you have here is a simple case of people who are informed about money acting one way, and people who are ignorant about money acting another way. It should be obvious which one is more correct.

  21. I just finished my first Microeconomics class.
    The biggest problem I had was with them calling assumed behavior “rational behavior”.
    From what I could tell, all the “rational behavior” was selfish and only in one’s own self interest.

    Once I was able to set aside the semantics and think of selfish behavior as “rational” then things worked out fine.

  22. As an Economics major, I can pretty much confirm this.

    When you rationalize human behaviour so finely and find out that, in the real world, most of the theories are supported… it really does dehumanize the whole species, in a way.

    See? Even this comment is depressing.

  23. Wonder how this experiment would go if performed in a socialist or communist country. Is it the study of Economics in general or of Capitalist theories in particular that is correlated with selfishness?

  24. @22, Beanolini,

    The problem I have with the last example is it is only two economics classes with two teachers preselected based on their economic beliefs. It is anecdotal evidence really rather than the other sections which we assume have less biased selection for the survey.

    Also rational does not mean selfish in the context of economics, it mean not contradictory. If someone values honesty, honor, and people liking them more so than they value the money they would gain then it is entirely rational to behave in an honest manner. Only to set up the simplest situations do we assume only money has value.

  25. :jmendonsa , September 4, 2008 10:34 AM
    :As an Economics major, I can pretty much confirm this.

    J, I disagree. I believe that the experiments presented are skewed towards either anonymous or non-interated games. In this case, sure, econonomists will act in the rational, self-interested way. Basically, in a one-time played prisoner’s dilemma, in which you’re trying to win money in an experiment, you’d be stupid (ok, naive) to NOT defect. (wiki “Dominance (Game Theory)”)

    But, while teaching you to defect in limited/anomymous games, game theory also emphasizes the importance of reputation, the power of punishment, and the long-term benefits of cooperation. When you remove the economist from the lab and place him into making real life decisions (politics, personal relationships, etc.), in which each choice affects the attitudes and future decisions of all players, he will (should) enter into a strategy more like tit-for-tat, in which he cooperates as long as everyone else does. In a society that embraces openness of information and transparency of public figures’ actions AND has the power to punish individual players, it’s in the economist’s worst interest to defect.

  26. As another Economics student, I feel compelled to come to the field’s defense (out of pure self-interest, of course).
    Oh, the study seems to hold up pretty well, and it does match my anecdotal experiences. But the term ‘Dismal Science‘ came from the fact that early economists held the morally dismal position of opposing slavery and supporting universal suffrage.

  27. I wonder how this plays on the letters section in The Economist?

    DEAR SIR – is begin a note to the selfish bastard whose blue paint is clearly visible on the side of my car in the parking lot.

  28. @ DILLENGER69:

    Indeed, western economists (esp. the Cato/Chicago School type) give rationality a bad name. They operate on the assumption that groups (even societies) and their dynamics are a mirage that conjure irrational impulses. Margaret Thatcher herself claimed that “society does not exist” to justify policies that amounted to every man for himself and those who opposed her were ‘irrational’ because many of their points could not be expressed in pounds sterling.

    “Rational” means that something is being observed, explained or dealt with in a measured way, usually involving qualification and quantification.

    But economists tend to categorize any aspects (or qualifications) of an issue that are not directly linked to money or property as irrational. For instance, ‘obsessing’ over the exploding prison population is ‘irrational’ to them, esp. if expanding prisons are an increasing source of profits. Concern for the kind of society one lives in is ‘irrational’, no matter how much non-monetary data one has to support their stand.

    No matter how necessary, the values and ties that form a community or society really don’t register unless they represent a marketing opportunity (sales potential). Even the grouping that economists do rally around, the corporation, is held to be a sort of individual or “person” conducting monetary transactions with other individuals in its own self-interest.

  29. Dillenger69, rationality and self-interest are two different things. A person can be a rational altruist, working optimally for the general good. Or a person can be irrationally self-interested, working sub-optimally for their own good.

    Rationality is not limited to people. Evolution tunes animals to behave in a rational way. Evolution also predicts that animals and people should behave in their self-interest (and to a lesser extent the interests of their relatives).

    These predictions by the theory of evolution are *usually* taken as a basic assumption in economics, but 4RugbyRd has a good point. Demonstrably, people do not act in their rational self-interest. They are either somewhat irrational, or somewhat acting in interests other than their own, or both.

    There’s hope for the profession yet.

    As to *why* people don’t behave in their rational self-interest, that is a very interesting question.

  30. I bet they would find a difference between mainstream neoclassical economists and Austrian economists.

  31. Could be that these people are the only ones to actually believe their own theories, hence they act in self interest.

    The New Scientist magazine has been running at least 2 articles recently refuting a lot of classical economic thinking and asking if it is time to dump economic orthodoxy and come up with a new theory that doesn’t depend on 19th century ideas of ‘equilibrium’ or the idea that a consumer is ‘rational’ or ‘independent’.

  32. 1. What most people call “selfish” economic theory calls “rational”.

    2. economic theory doesn’t attach a value to “rational” behaviour, but merely notes that released from any constraint, this is how intelligent organisms will behave. In other words, if you weren’t afraid of the being caught, and you didn’t have moral inhibitions installed by your mum / nursery teacher / rabbi, you would flush your plutonium down the drain like the next bastard.

    3. ergo, if economics students behave badly – blame their mum, nursery teacher and rabbi. the only thing they might have acquired from their economics studies is how to be more efficient assholes. The base quality of assholines is inherent to western culture. Example? How many of you lovely economist-bashers are carbon neutral? I thought so. So we’re all dumping in the soup pot, present party included.

    4. Here’s an alternative paper on the subject:

    Ariel Rubinstein (2006) A Sceptic’s Comment on the Study of Economics. The Economic Journal, 116(510): 1-9, 2006.
    (bib record:

    A survey was carried out among two groups of undergraduate economics students and four groups of students in mathematics, law, philosophy and business administration. The main survey question involved a conflict between profit maximisation and the welfare of the workers who would be fired to achieve it. Significant differences were found between the choices of the groups. The results were reinforced by a survey conducted among readers of an Israeli business newspaper and PhD students of Harvard. It is argued that the overly mathematical methods used to teach economics encourage students to lean towards profit maximisation.

    Some conclusions

    Our view of the results as economists cannot easily be separated from our personal beliefs about what an economic agent should do in such a situation. If you believe that the manager of a company is obliged morally or legally to maximise profits,then you should be pleased by the success of economics in educating its students.
    However, you might be disturbed by the fact that so many economics students did not show any tendency to maximise profits. Furthermore, you might be no less worried by the fact that even the Harvard PhD students differed in their prediction of what a real manager would do.
    Alternatively, you might approach the results with the idea that a manager is committed not only to maximising profits but also to taking into account the welfare of his workers, particularly when the economy is in recession and unemployment is high (as stated in the questionnaire). Under these circumstances, striving to maximise profits regardless of the consequences appears to be ethically problematic.
    I consider the differences between the two groups of economics undergraduates and the other groups to be significant. The economics students had a much stronger tendency to maximise profits than did the subjects in other groups.
    Admittedly, a major drawback of the survey is its inability to determine clearly whether differences are due to selection bias or are the result of indoctrination.
    (Originally, I had intended to present the questions to economics students prior to the beginning of their studies but was unable to do so for technical reasons.) But even if the economics profession attracts certain types of people, the results still suggest that something is wrong in the way we relate to students in our undergraduate programmes. It appears that the MBA programme is more successful in producing students with more balanced views. In fact, I found it surprising that the results obtained from the MBA students were so different from those of the Econ students. Perhaps this has to do with the way that the MBA programme is taught.
    In other words, the study of cases might stimulate more comprehensive thinking about real life problems whereas the study of economics through mathematical exercises conceals the need to balance between conflicting interests.

  33. Thanks Super Nate. In fact, I think that one deserves a quote:

    Carlyle called ‘economics the dismal science’ not because of its pessimism but because he objected to its humanitarian optimism Carlyle did not in fact direct his remarks at Ricardo or Malthus, or even at Adam Smith. He was writing a rebuttal of ideas expressed by John Stewart Mill, whose Principles of Political Economy was published in 1848. Mill had advanced the notion that all peoples on Earth, from all races and colours, were basically the same. Blackmen and women were not born to slavery; they were forced into it. Carlyle absolutely disagreed with Mill’s humanistic notion. He expresses in his pamphlet the most offensive justification of slavery, denied explicitly that Africans were of the same species at Europeans (the very idea incensed Carlyle — as it did his friends and colleagues, among whom we find John Ruskin and Charles Dickens), and he lambasted J. S. Mill, an economist and former close friend for claiming the contrary view.

    Btw, let’s not confuse economics with capitalism, although most schools of economy do. Capitalism is – “the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” ( Not that I agree, but you have to admire the bravado..

  34. Being selfish, paltry, sordid and penurious is not just about Money, it’s affects all aspects of life.

    It affects gratitude, courtesy, consideration and love to name a few.

    I don’t like them. period.

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