Spotted at last: “Homo economicus”?

By Neuroskeptic | July 25, 2014 10:12 am

Are we selfish?

Economists like to say that, to a first approximation, we are. In other words, that we tend to seek to maximize our own rewards, in a more or less rational manner.

The trouble is that this theory (at least, a straightforward interpretation of it) doesn’t describe how people behave in many situations. For example, given a sum of money and asked to decide how to split it between themselves and an anonymous stranger, most people choose to give some of it away. This scenario is called the Dictator Game, and along with a handful of similar tasks, it’s a problem for the selfish theory.

But what if some people do behave in an economically optimal way? What if the economic man, Homo economicus does exist after all – but as a minority of Homo sapiens?

This is what Japanese researchers Toshio Yamagishi and colleagues say in a new paper in Psychological Science: In Search of Homo economicus (no relation to the 2001 paper of the same name.)

Yamagishi et al tested 564 adults who lived in “a relatively wealthy Tokyo suburb”. The headline result was that 7% of the participants displayed “Homo economicus” behaviour both in the Dictator Game, and in the more complex Sequential Prisoner’s Dilemma. That is, 7% of people always chose to maximize their own expected payoff, regardless of how this disadvantaged anyone else.

Who were these 7%? Men were somewhat overrepresented (8.5% of men vs. 5.2% of women fell into this group), and they also tended to be younger, comprising 18% of those in their 20s, but just 5% of people in their 40s. Compared to the other 93%, they also rated themselves more highly on questionnaires measuring things like ‘individualist social-value orientation’ and self-esteem.

Remarkably, “Homo economicus” scored higher IQs than their less selfish-rational participants did – the difference being roughly 10 points.

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This is all quite interesting, but unfortunately Yamagishi et al got a bit carried away when it came to discussing these results. The spirit of scholarly discourse seems to have been grappling with the ghost of Ayn Rand for the soul of whoever wrote these lines, for example:

In the overall picture of Homo economicus, we see a person who is intelligent, driven to excel and to dominate other people, and capable of impulse control and of working toward long-term goals. In other words, Homo economicus is the prototypical member of the social and economic elite.

The traits of Homo economicus seem to lead to social and economic success, life satisfaction, and high self-esteem. Homo economicus is rational and a successful egoist… The fact that Homo economicus is socioeconomically successful […] strongly suggests that [s/he] is a productive member of society.

This is overblown. While the “Homo economicus” group did have a higher IQ on average, their mean IQ was still only 107, meaning that 1/3rd of the population are smarter than them. In other words they are (if you believe IQ-by-profession tables) on a par with the average high school teacher or fashion designer; respectable, but hardly elite.

A deeper problem with the Yamagishi discussion is that it repeatedly talks about the most selfish 7% as if they were a distinct group. But in fact their IQ scores, like their personality traits, were varied, and overlapped with the rest of the sample. They differed on average, but this doesn’t make them a category apart from everyone else.

Finally – is ‘Homo economicus’ really a good description of the maximally selfish group, or are they just, well, selfish? It is known that most people fall short of the ideal of economic rationality in many different ways, of which being generous to anonymous strangers is only one.

We don’t know whether Yamagishi et al’s ‘Homo economicus’ are more rational in these other ways. We don’t know if they’re less prone to the framing effect, let’s say. If they are, then (and only then) they could lay a claim to being more rational than the rest of us. But as it stands, they are just more selfish.

ResearchBlogging.orgYamagishi T, Li Y, Takagishi H, Matsumoto Y, & Kiyonari T (2014). In Search of Homo economicus. Psychological Science PMID: 25037961

  • http://www.amazon.com/Rolf-Degen/e/B001K1NBP4/ref=ntt_athr_dp_pel_2 Rolf Degen

    Another question is if the behavior in the Dictator Game and the Sequential Prisoner’s Dilemma is diagnostic for everyday social behavior. We know that human behavior is strongly influenced by situational factors and it could be that we are all different in the way social triggers influence our behavior. So it could be that someone who is selfish in the Dictator Game is more ready to leap into a river and save a drowning child than others.

    • Jake Stine

      … or we could scrap the ‘controlled environment’ stuff that works so well in standard science and just do observational analysis on the myriad of real-world scenarios going on around us every day. Eg, the ones that clearly indicate that many economists’ ideal beliefs about human decision making are wrong, and that humans are, in fact, both emotional and irrational — and unpredictably so — when it comes to making decisions that should involve simple mathematics that point to a single logically “correct” economic decision.

      Anyone who is versed in the understanding of neural networks furthermore would understand that a purely logical, rational, and predictable human decision tree is biologically impossible. Until our brains are replaced with discreet deterministic logic chips, we won’t be what idealist economists envision us as being.

  • Stephen Bounds

    Unless you could define a unique subgroup that consistently scored highly on this test, I treat this result with extreme skepticism. While I know this experiment would have been important to the researchers, participants may not all have been driven to take deep consideration of the options.

    *Particularly* if the first option given to participants was to keep all the money, this feels more like evidence of a donkey vote. In Australian elections (mandatory voting) around 7% of voters either choose to leave all boxes blank, or to number their preferences 1-2-3-4-5…

    Seems pretty plausible that this could be the same explanation for the 7% here.

  • cat_mech

    Possible error? You wrote: ‘Yamagishi et al tested 564 adults’ where the abstract on the site linked states ‘We found that 31 of 446 residents of’.

    Perhaps, if I have misinterpreted, you might be kind enough to point out my error for me? If so, thanks.

    That being said: Interesting blog; I was unsure if I correctly concluded that the author shares the same disdain I do with the concepts of ‘Homo Economicus’ and the spectrum of people that espouse such nonsense, but regardless it’s good to see such cringe-worthy ‘studies’ (I can’t bring myself to put the word ‘scientific’ before the previous term) get dissected and rebuked.

    I’m all for freedom of expression, though- if they want to use the term ‘Homo Economicus’ to describe the 5-6% of the populace that everyone else describes as ‘sociopaths’, it’s just one more acrid layer of tear inducing, toxic peel to stink up the room while everyone else tries to make their way through the vast and infinite onion of cognitive dissonance that fuels ultra conservative philosophy on… pretty much everything.

    I could be wrong, though! It happens. Maybe they didn’t find a way to reframe sociopathic behaviours as if they were normal, maybe even to be expected and embraced. Maybe…

    ‘This past summer [a study of] a nationally representative sample of
    35,000 Americans found that 6 percent of Americans, or 1 out of 16, had
    experienced [clinical narcissistic personality disorder (NPD)] at some
    point in their lives.’

    http://health.usnews.com/health-news/family-health/brain-and-behavior/articles/2009/04/21/narcissism-epidemic-why-there-are-so-many-narcissists-now

    From the blog above:

    ‘That is, 7% of people always chose to maximize their own expected payoff, regardless of how this disadvantaged anyone else.’

    I choose to be optimistic; we make advances in therapy, psychiatry and public education all the time. If we keep working at it, maybe we can get that 7 down to a 6, or a 5, even.

    • http://blogs.discovermagazine.com/neuroskeptic/ Neuroskeptic

      Ah yes – the sample size was initially 564 but it decreased over the course of the study (due to drop-outs – it was a multi-stage study.)

  • zwagbog

    Homo economicus = Psychopath

  • Jake Stine

    That conclusion of the research alone creates in my mind a distinct possibility that the research as a whole is tainted with bias. That, to be fair, is more common than uncommon in socioeconomic research. However, there’s a point where the bias oozes with such levels of pre-supposed lunacy that it’s just way more likely then not that the entire body of research data has been ‘accidentally’ engineered in a way to help produce the expected outcome.

    • http://blogs.discovermagazine.com/neuroskeptic/ Neuroskeptic

      Mmm. Maybe. That wasn’t the impression I got. I see this as quite nice data that’s been severely over-interpreted.

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  • CarolynKay1

    What about the 93% who are harmed by the selfish actions of the 7%? And why aren’t we fighting back? – http://bit.ly/Q3zdMU

  • Ibn al-Haytham

    That successfully applying selfish strategies correlated with IQ is only logical, as selfish contenders with low IQ are more likely to miscalculate what’s best for them.

    • http://blogs.discovermagazine.com/neuroskeptic/ Neuroskeptic

      Excellent point!

    • BradMueller

      Providing, two things; that you can quantify’ selfishness’ something that seems to me highly subjective, and that you are intelligent enough to know what is best for someone else.
      I have found that economics is a good predictor of human behavior regardless of IQ.

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  • cd

    I played the Dictator Game as an experimental subject once. Except I misheard part of the instructions and thought I was playing the Ultimatum Game, and remembered that I’d heard in psych class that (incomprehensibly) you would get nothing unless you offered at least 30% or so. I wouldn’t have offered anything if it weren’t for this error.

    But I don’t understand how these games are any reasonable measure of selfishness. We’re all probably doing lots of experiments, and we’ll each have a chance to be the dictator (or otherwise randomly be on the “winning” side of things) eventually, so either mode (everyone offers some, or everyone offers none) gives the same outcome on average and both are fair.

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  • Nyrala Sirom

    Hmmm. I don’t know. This person is clearly selfish and trying to maximize his/her/its profit, but on the other hand, it is very stupid. That sort of contradicts the results of the study, don’t you think?

    • http://blogs.discovermagazine.com/neuroskeptic/ Neuroskeptic

      Haha!

      I’m going to leave that spam there now.

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  • Julia Allis

    There’s an underlying assumption here, isn’t there, that financial benefit is the greatest benefit? If you value social influence over money, then sharing becomes the more profitable course of action.

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No brain. No gain.

About Neuroskeptic

Neuroskeptic is a British neuroscientist who takes a skeptical look at his own field, and beyond. His blog offers a look at the latest developments in neuroscience, psychiatry and psychology through a critical lens.

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