People Want a Fair Economic Shake

[one...two...tree 2,762]

Gregory Rodriguez, LA Times

It's a dog-eat-dog world. It's sink or swim. Every man for himself. There's no such thing as a free lunch.

If you think about it, we Americans have dozens of ways to express our low opinion of human motives. Sure, we romanticize past eras of social cooperation -- conservatives wax nostalgic about small-town voluntarism, liberals pine for the days of mass political action. Yet it seems that, particularly after the Reagan (or Alex P. Keaton) era, our language betrays an almost Hobbesian world view: Bellum omnium contra omnes ("The war of all against all").

But a new study out of UCLA seems to suggest a bit sunnier view of human nature. Psychologist Golnaz Tabibnia, along with colleagues Ajay Satpute and Matthew Lieberman, used a psychological test called the "ultimatum game" to look at the brain's reactions to the eternal conflict between material self-interest and fairness. What they found was that when people were treated fairly, their brains responded in the same way as when they eat chocolate or glance at beautiful faces.

Here's how it worked: Two players were asked to come to an agreement on how to share a particular amount of money; both were told what the total was. Let's say Person No. 1 had $30. That person was then told he could divide that amount in any way he wanted with Person No. 2. If No. 2 declined the offer, neither player received a dime.

Materially speaking, pretty much any amount that Person No. 2 was offered was free money. If that player was only motivated by material gain, then presumably it wouldn't matter if Person No. 1 was sharing $5 out of a $10 pot or $5 out of a $30 pot. Either way, the monetary benefit was the same, although the first split, under the circumstances was the fairest.

And as it turns out, that mattered. The prospective recipients had more on their minds -- literally -- than just material gain.

The researchers scanned several parts of the brains of the participants who were offered money while they were in the process of evaluating the offers. What they discovered was that parts of the brain that register negative emotions were stimulated by unfair offers, and reward-related regions of the brain were activated by fair ones. In other words, they found that the brain is sensitive to context and the way the deal is conducted. The further the split dropped below a 50-50 ratio, the more participants turned down the offer. They cared about fairness even to the detriment of some material gain.

Yes, I remember what my fifth-grade basketball coach told us when we were on a winning streak -- it's not whether you win or lose, it's how you play the game -- but I can't say I ever really believed him. My elitist liberal education also imbued me with the sense that cooperation among strangers should be induced because, left on our own, we'd all act solely out of self-interest. I had long assumed that while a bit over the top, Thomas Hobbes had put forth a pretty strong case.

But what this new study and others are beginning to suggest is that we humanoids might actually be programmed to seek some semblance of fairness.

Tabibnia, a 32-year-old Iranian-born researcher, is reluctant to draw broad conclusions from her experiment, but she does confess that it paints a rather cheery view of humanity. Although she does not know how much of the brain's reactions -- this small study was conducted on 12 UCLA undergraduates -- are biologically predetermined and how much is culturally programmed, she suspects that it's a bit of both.

"We are a highly social species," she says, "and our relationships are very important to us. I'm not the only one who suspects that positive social affiliations satisfy a basic human need. I imagine this is because cooperation is part of survival."

Of course, this doesn't mean that every man is not out for himself. Particularly in this country, where the ideologies of individualism, free-market capitalism and liberal democracy reign supreme, social cohesion will always be a struggle. But amid all our self-interested activity, there might be a part of us that values, even longs for, social cooperation for its own sake.

But before we conclude that, we might want to wait for the results of a study that Tabibnia says she'd love to conduct one day: to see how the brain reacts when people are watching others receive unfair offers.

grodriguez@latimescolumnists.com

http://www.latimes.com/news/opinion/la-oe-...,7952972.column

[w¡n9Nµ7 §£@¥€r 123]

Game theory is fun.

[mawilson 2,133]

Here's how it worked: Two players were asked to come to an agreement on how to share a particular amount of money; both were told what the total was. Let's say Person No. 1 had $30. That person was then told he could divide that amount in any way he wanted with Person No. 2. If No. 2 declined the offer, neither player received a dime.

Materially speaking, pretty much any amount that Person No. 2 was offered was free money. If that player was only motivated by material gain, then presumably it wouldn't matter if Person No. 1 was sharing $5 out of a $10 pot or $5 out of a $30 pot. Either way, the monetary benefit was the same, although the first split, under the circumstances was the fairest.

In other words, people prefer communism (where everyone is equally poor) to

capitalism's wide gulf between rich and poor?

[one...two...tree 2,762]

Here's how it worked: Two players were asked to come to an agreement on how to share a particular amount of money; both were told what the total was. Let's say Person No. 1 had $30. That person was then told he could divide that amount in any way he wanted with Person No. 2. If No. 2 declined the offer, neither player received a dime.

Materially speaking, pretty much any amount that Person No. 2 was offered was free money. If that player was only motivated by material gain, then presumably it wouldn't matter if Person No. 1 was sharing $5 out of a $10 pot or $5 out of a $30 pot. Either way, the monetary benefit was the same, although the first split, under the circumstances was the fairest.

In other words, people prefer communism (where everyone is equally poor) to

capitalism's wide gulf between rich and poor?

That's a stretch.

[mawilson 2,133]

Here's how it worked: Two players were asked to come to an agreement on how to share a particular amount of money; both were told what the total was. Let's say Person No. 1 had $30. That person was then told he could divide that amount in any way he wanted with Person No. 2. If No. 2 declined the offer, neither player received a dime.

Materially speaking, pretty much any amount that Person No. 2 was offered was free money. If that player was only motivated by material gain, then presumably it wouldn't matter if Person No. 1 was sharing $5 out of a $10 pot or $5 out of a $30 pot. Either way, the monetary benefit was the same, although the first split, under the circumstances was the fairest.

In other words, people prefer communism (where everyone is equally poor) to

capitalism's wide gulf between rich and poor?

That's a stretch.

Hardly. No. 2 would rather be poor (together with No. 1) than let No. 1 have more money.

[one...two...tree 2,762]

Here's how it worked: Two players were asked to come to an agreement on how to share a particular amount of money; both were told what the total was. Let's say Person No. 1 had $30. That person was then told he could divide that amount in any way he wanted with Person No. 2. If No. 2 declined the offer, neither player received a dime.

Materially speaking, pretty much any amount that Person No. 2 was offered was free money. If that player was only motivated by material gain, then presumably it wouldn't matter if Person No. 1 was sharing $5 out of a $10 pot or $5 out of a $30 pot. Either way, the monetary benefit was the same, although the first split, under the circumstances was the fairest.

In other words, people prefer communism (where everyone is equally poor) to

capitalism's wide gulf between rich and poor?

That's a stretch.

Hardly. No. 2 would rather be poor (together with No. 1) than let No. 1 have more money.

Hardly. No. 2 would rather decline the offer of getting less than their fair share of the prize money than let No. 1 keep more of the money.

[chri'stina 190]

OT-Steven, that pic of Jinky and Joshua is adorable.

[one...two...tree 2,762]

OT-Steven, that pic of Jinky and Joshua is adorable.

Thank you, Stina.

[Mr. Big Dog 10,747]

Why is it always the either-or discussion of extremes? Ludwig Erhard knew long ago that there's a lot of promise in a hybrid economic model which is known as social market economy.

[mawilson 2,133]

Hardly. No. 2 would rather decline the offer of getting less than their fair share of the prize money than let No. 1 keep more of the money.

If this was a real-life problem and No. 2's survival depended on that money,

I doubt No. 2 would choose to starve, even if No. 1 were to starve with him.

[one...two...tree 2,762]

Hardly. No. 2 would rather decline the offer of getting less than their fair share of the prize money than let No. 1 keep more of the money.

If this was a real-life problem and No. 2's survival depended on that money,

I doubt No. 2 would choose to starve, even if No. 1 were to starve with him.

LOL...you're funny.

[mawilson 2,133]

Hardly. No. 2 would rather decline the offer of getting less than their fair share of the prize money than let No. 1 keep more of the money.

If this was a real-life problem and No. 2's survival depended on that money,

I doubt No. 2 would choose to starve, even if No. 1 were to starve with him.

LOL...you're funny.

Huh?

Think: No. 1 = employer, No. 2 = employee

Employers can get away with murder because employees are afraid of losing their jobs.

[one...two...tree 2,762]

Hardly. No. 2 would rather decline the offer of getting less than their fair share of the prize money than let No. 1 keep more of the money.

If this was a real-life problem and No. 2's survival depended on that money,

I doubt No. 2 would choose to starve, even if No. 1 were to starve with him.

LOL...you're funny.

Huh?

Think: No. 1 = employer, No. 2 = employee

Employers can get away with murder because employees are afraid of losing their jobs.

That's a different study which you're welcome to try and see if No. 2 declines.

[mawilson 2,133]

That's a different study which you're welcome to try and see if No. 2 declines.

If everyone acted like No. 2, there would be no disparity between the rich and the poor.

Corollary: people act like No. 2 only in a hypothetical test scenario.

[one...two...tree 2,762]

That's a different study which you're welcome to try and see if No. 2 declines.

If everyone acted like No. 2, there would be no disparity between the rich and the poor.

Corollary: people act like No. 2 only in a hypothetical test scenario.

In the study, the two players are equal - neither one of them has an advantage over the other. I suppose you could say No. 1 has the advantage to decide how the prize money is split between the two, but that advantage is countered with No. 2's power to decline the offer where neither of them benefit. That's a far cry from an employer/employee relationship, where money is linked to productivity and profit, rather than just a handout.