In a classic experimental economics paper, Marwell and Ames observed Economists Free Ride, Does Anyone Else?
The paper reports the results of a simple experiment: subjects are given tokens, which they can either put in an individual pool, which benefits only themselves, or a common pool, which benefits all participants in the experiment. The strategy that maximizes a player's personal return (in a one-shot game) is to put all of her tokens into the individual pool, because that way she is the only one enjoying the benefits from her investment.
The common pool, however, offers a higher overall rate of return, even though that return is split more ways. The best strategy for the group as a whole would be to cooperate, and put all of their tokens in the common pool. Yet, because the game is set up so that people cannot communicate or coordinate their actions, every one has an incentive to "free ride" - invest their own tokens in the individual pool, and hope to reap the benefits of other's generosity.
Marwell and Ames ran their experiments on the nearest subjects: students. They discovered a puzzling pattern. Economics students contributed less to the common pool, and kept more for themselves, than others. Marwell and Ames set out two possible explanations of their findings, selection and indoctrination:
Economists may be selected for their work by virtue of their preoccupation with the ‘rational’ allocation of money and goods. Or they may start behaving according to the general tenets of the theories they study. Confronted with a situation where others may not behave rationally, they nevertheless behave the way good economic theory predicts.
The suggestion that we are special and different proved irresistable to economists, and Marwell and Ames' paper spawned others such as Frank, Gilovich and Regan's Does Studying Economics Inhibit Cooperation? and Carter and Irons' Are Economists Different and, If So, Why?
The relative importance of selection and indoctrination has never been definitively established, but there is at least some evidence that teaching students about free riding affects their behaviour. For example, Frank et al find that students' free riding increased more when exposed to a professor who "placed heavy emphasis on the prisoner's dilemma and related illustrations of how survival imperatives often militate against cooperation", and less when students were taught by an economics development specialist who devoted less time to game theory.
I've always found the idea that studying economics inhibits cooperation profoundly satisfying. It suggests that Econ1000 makes people see the world differently, and helps them to think like an economist. What people learn in Econ 1000 changes how they act and behave. Frank et al seem to interpret their findings in this same light, repeatedly using the phrase "training in economics," with the implication that something - a skill, an attitude, a way of thinking - has actually been taught.
Yet recent research in behavioural economics calls this comforting view of economics instruction into question. Dan Ariely reports that, "we’ve found repeatedly that people become more likely to lie and cheat after witnessing the dishonest behavior of others." Are the students who are repeatedly exposed to the prisoner's dilemma actually learning something about game theory and pay-offs, and acting accordingly? Or are they simply modelling their behaviour on the examples of non-cooperation that they have heard about in class, without really thinking about what they are doing, or why?
[I am not aware of any one who has tried to distinguish between these two explanations of the cooperation-inhibiting effects of economics, though it might be possible to do - just expose one group of subjects to an explanation of how to calculate payoffs and dominant strategies prior to the experiment, and the other group to stories about people cheating and defecting.]
Yet it matters. Years ago, I ran the Marwell and Ames experiment in the graduate public finance course. The student who earned the highest personal return - that is, who free rode to the greatest degree - was a newly arrived PhD student from China. Recently I was reminiscing with him about this incident. I said, "I was really impressed by the way you were able to work out the rational strategy. What was going through your mind?" His reply was something along the lines of: "Actually, I just didn't understand what we were supposed to be doing."
This is the question on my mind: what do people actually learn when they study economics?