Wednesday, February 25, 2015

Never Trust an Economist

Researcher Robert Frank and his colleagues have discovered several remarkable things about people trained in neoclassical economics. In a number of tests, including a game theory test called the prisoner's dilemma (which measures a person's propensity to trust others), they found that neoclassical economists are more like than other people to betray their partners. . . .

Economists show, as it were, an unhealthy interest in the subject of self-interest.

--Tim Flannery, Here on Earth

1 comment:

G. Verloren said...

"Economists show, as it were, an unhealthy interest in the subject of self-interest."

This isn't quite accurate.

In the prisoner's dilemma, it is demonstrably in one's best interest for all parties to cooperate. If economists were truly self-interested, they'd cooperate more, not less.

It seems to me the fact that they do not is based more in risk aversion than in self-interest. Practically by definition, a classical economist will be inclined to take the choice of a small guaranteed profit over a significant gamble on a larger profit.