CymraegGenerous or 'rational'?
People in general are often described as being selfish, in the sense of maximising their rational self-interests. However, most sociologists, anthropologists, psychologists and experimental economists see a very different side to humanity. In the following section we explore a number of case studies that depict people as having a deeply embedded sense of justice and fairness, rather than being necessarily selfish.
In 'The Ultimatum Game', a classic study performed in experimental economics, two random people are paired together and given $10 to divide between them. They have to follow this rule: one of the pair, the proposer, decides on her own what the split should be, and then makes a take-it-or-leave-it-offer to the other person, the responder. Either the responder accepts the offer, in which case both people walk away with their shares of free cash, or the responder rejects the offer in which case both people walk away with nothing.
In theory, if people were truly rational the proposer would keep $9 and only offer the responder $1, which the responder should accept. It is better to have $1 of free money than to have nothing at all. However, when the proposers offered low offers – say anything below $3 – the responders would generally reject the offer. In other words, the responders would rather lose free money in order to punish overly greedy proposers.
The most interesting result from the Ultimatum game is that the most common offer proposed is $5, a 50/50 split of the cash. This game has been played across a wide range of different countries, including parts of the world where $10 is the equivalent of three days work - and the results remain roughly the same. This result suggests that people are not inherently selfish, as they have a deeply embedded sense of fairness and justice.
The Public-Goods game has also been performed in a number of different countries. In this game four random people are placed together in a group, and each person is given twenty tokens. The game lasts for four rounds, and in each round a player can either contribute tokens to the public pot, or keep them for himself. If a player invests a token, it costs him money. For every token invested, he personally only earns 0.4 tokens. But every other member in the group also gets 0.4 tokens, so the group as a whole gets 1.6 tokens for every token that's invested. The point being this: if everyone keeps their money and invests nothing, they each walk away with only 20 tokens. If all four members of the group invest all their money, then they each walk away with 32 tokens. According to game theory the smartest strategy will be to invest nothing yourself and simply free-ride off of everybody else's contribution. But here's the catch, if everyone does that, then there will be no contributions and everybody will walk away with just the original twenty tokens each.
When the experiment is carried out most people, at first, do not act selfishly. In general, most of the players contributed about half or more of their tokens to the public pot. However, as each round progresses, and players see some people free-riding, the rate of contributions diminishes until by the end of the game, 70 – 80 percent of the players were free-riding. Thus, the group as a whole ended up being much poorer.
From repeated trials of the Public-goods game, economists Fehr and Gachter suggested that people generally fall into three categories: twenty-five percent or so are indeed selfish and always free-ride; a small minority are altruists, who contribute heavily to the public pot and continue to do so even as others free-ride. The biggest percentage, however, are the conditional consenters. The conditional consenters start out contributing at least some of their wealth, but watching others free-ride makes them eventually far less likely to contribute, until by the end of most public-good games, almost all the conditional consenters are no longer cooperating.
Fehr and Gachter then changed the game so that the players could see who was free-riding, and they also set up a system whereby players could punish the free-riders. For the cost of a third of a token, players could take away a whole token each time somebody was caught free-riding. Again, the fact that players would spend their own money - a third of a token - to punish a free-rider goes against the selfish/rational model of economic behavior. However, the conditional consenters did indeed 'punish' the free-riders and soon everybody was chipping in their fair share to the public pot.
Both the Ultimatum Game and the Public-goods Game shows us that people display 'strong reciprocity,' which is the willingness to punish bad behavior (and reward good behavior). Strong reciprocity is a 'pro-social behavior,' because it pushes people to transcend a narrow definition of self-interest and act in ways that end up serving the common good.
Not only do these two case studies in experimental economics show the prevalence of pro-social behavior among people, there is also an extensive literature developing within economics that questions the notion that people are generally selfish. To take just one example, the Nobel prize winning work of Daniel Kahneman has extensively shown that we do not always act in self-interested ways. Time and time again, people sacrifice personal gain in the name of justice and fairness.
This sense of fairness is not just peculiar to humans. Take the work of primatologists Sarah F. Brosnan and Frans B. M. de Waal for example, which examines the manner in which female capuchin monkeys are also offended by unfair or unjust treatment. The monkeys were trained to give pebbles in exchange for food. A system was set up whereby each pebble exchanged would received a slice of cucumber. The monkeys were made to work in pairs and the exchange of pebbles for food worked 95% of the time.
However, the scientists changed the situation one day by giving one monkey a wonderful grape for a pebble, while still giving the others slices of cucumber. Faced with this injustice, many of the other capuchins refused to eat their cucumbers, even though a pebble for a slice of cucumber was still a very good deal. Indeed, the other monkeys were so unhappy that 40 percent stopped trading entirely. This situation was further exacerbated when one monkey was given a grape for doing nothing at all. In that case many of the other monkeys threw away their pebbles, and trades took place only 20 percent of the time. So, in a manner very similar to the Ultimatum game, the monkeys were willing to give up free food simply to express displeasure at the injustice of the system.
To summarise, these examples show that people – and even monkeys – have a deeply embedded sense of justice and fairness. The assumption that people are inherently selfish is one that is common in western culture. However, there is a wealth of research that shows that people act in ways that are informed by a sense of justice and fairness, rather than being simply interested in maximising their self-interests.