DAVID GREENE, HOST:
You know, in economics, students are often taught that the market works its wonders through selfishness. It is not from the benevolence of the butcher, the brewer or the baker that we expect our dinner but from their regard to their own interest. Those words come from the famed 18th-century economist Adam Smith. He wrote that many years ago. Now there is new research exploring how this lesson shapes the way students themselves behave. And to talk about this, we're joined by the most unselfish person I could imagine...
SHANKAR VEDANTAM, BYLINE: (Laughter).
GREENE: ...NPR social science correspondent Shankar Vedantam.
VEDANTAM: Hi, David.
GREENE: So don't we want education to change the way people behave, or are you going to tell me this is a bad thing?
VEDANTAM: No, we want education to change the way students behave, but I'm not sure learning economics has quite the effects that professors of economics might want from students. Students, of course, are taught that self-interest drives economic behavior. It's a cornerstone idea of the field. Students are also taught that it's rational to behave this way. We use the phrase rational self-interest. I was speaking with Homa Zarghamee at Barnard College - she's an economist. Along with John Ifcher, she wanted to know whether learning that selfishness is rational causes students to behave selfishly.
GREENE: So how do you study something like that?
VEDANTAM: Well, she conducted a series of experiments. In one, she had students play a common game known as the ultimatum game. Basically, David, let's say you and I have 20 bucks, and I can choose to give you a share. You only get to say yes or no. You can't negotiate. So if you agree to my division, we divide the money. If you reject my division, neither of us gets anything.
GREENE: Wait a minute. So I would want something more than nothing. So wouldn't I just agree to whatever you're offering?
VEDANTAM: Precisely. So standard economic theory suggests that I should offer you a buck and keep $19. Because we're both acting in our self-interests...
VEDANTAM: ...I should keep as much as possible, and you should say yes to a buck because getting $1 is better than getting nothing.
VEDANTAM: Zarghamee and Ifcher find that students asked to share $20 with a partner tend to divide it close to 50-50. In fact, studies all over the world show that people do this, even when they are playing with strangers, not just among friends. They tend to prioritize fairness over selfishness. But Zarghamee says that when students are taught how rational self-interested economic actors ought to behave, something happens to the way they behave.
HOMA ZARGHAMEE: On average, before the lesson, they were offering approximately $8.50. But for people who received the standard economic lesson, it goes from about $8.50 down to about $4.50.
GREENE: Learning economics causes people to hoard more money and not offer it up? That's amazing.
VEDANTAM: (Laughter) Well, I asked Zarghamee whether learning economics actually makes people selfish. Here's what she said.
ZARGHAMEE: I don't know that people are just immediately becoming more selfish, per se. It's just that they're internalizing this lesson somehow, and it's bringing out behavior that isn't necessarily for the common good.
VEDANTAM: You know, David, in many ways, it's important to remember that the rational actor model that economists build is a model. It's very powerful in that it does explain how people behave under many circumstances, but sometimes you can forget that this is a model and start to think that this is not just a useful mathematical tool but a code for behavior. Zarghamee mentioned that Adam Smith quote - it's not from the benevolence of the butcher, the brewer and the baker - and said that Adam Smith's mother cooked, cleaned and cared for him through much of his life. So even as he was touting the virtues of selfishness, he was depending on someone else acting unselfishly.
GREENE: That's amazing. What an irony. Well, if you have a friend taking economics, I guess the lesson is watch out.
VEDANTAM: Or ask your mother (laughter).
GREENE: (Laughter) Or ask your mother who will offer the best advice.
VEDANTAM: Thanks, David.
GREENE: Shankar Vedantam joins us regularly to talk about social science research, and he explores ideas about human behavior on his new podcast Hidden Brain.
(SOUNDBITE OF THEO CROKER'S "IT'S NOT YOU, IT'S ME (BUT YOU DIDN'T HELP)")
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