Does Thinking about Economics can Make Us More Selfish?

Earlier today I was reading an article in LinkedIn “Does Studying Economics Breed Greed?” and it made me think about our own sets of expectations and the way we interact with others. In principle I can agree with some of the statements in the article, there may be many additional reasons behind the behavior as described. Almost all of these findings can be attributed to an expectation for immediate satisfaction (short term) and personal satisfaction (individual) which can be responsible for what is called “Agent Theory behavior” versus a long term orientation and a more social approach.
 
According to the article most of the students were from classical “first world countries” were enrolled in different universities and courses. The study found that students with a focus on economics very quickly changed their expected behavior after “learning” about Game Theory, or Economics; while their counterparts in non-economics fields retained their original sets of values. Some of the primary conclusions stated that:
 
  • Altruistic values drop among Economic students
  • Economic students stay selfish, even when their peers become more cooperative
  • After taking Economics, students become more selfish and expect worse of others.
  • Just thinking about Economics can make us less caring
 
While the article itself presents a number of interesting findings, but does not attempts to identify the causes of the actual behavior, beyond the commonality of the study of Economics, and/or Game Theory; a classical “win-lose” behavior that could be closely associated to a number of cultural background issues. One interesting potential extension to the study will be extending the same study to include students from other countries with substantially different sets of cultural expectations. 
 
The actual behavior shown in the study is very similar to what is known as the “Agency Theory” which indicates that individuals will act on their own interest even when placed in positions where they are responsible for the interest of a group (CEOs, CXOs, Managers, and even isolated individuals). While the theory explains the behavior, it does not actually attempts to identify some of the potential reasons for it, nor it determines if there are any other factors that may actually influence individuals towards or away from such behavior. 
 
Paraphrasing Dr. Hofstede “Culture is the Software of the Mind”, and the behavior of the students could be explained by a combination of two primary cultural dimensions identified on his Cultural Dimensions theory. The first dimension is called “Long Term Orientation” and it emphasizes the westerner preference for a stable, conventional, environment focused on absolute truth, which it supports a need for short term goals since they will be easier to measure by the individual or organization. The second dimension is called “Individualism” which is related to the way members of a society interact, and their ability to put the social values, expectations, or needs above their own personal needs. 
 
When we look at these two dimensions we could consider that in principle the study findings simply reflect the set of cultural expectations of a westerner culture, where short term goals are rewarded, and personal “wins” and admired and encouraged by society. While for some the behavior may be controversial, at the same time we could associate them to an ability to focus on the classical “smart” tasks, which are one of the fundamental new mantras of the modern westerner business world culture. When economic students learn that CXO’s, sales persons, and almost anybody else will be rewarded by their “quarterly” results through the study of western economics and game theory, they may have little option but to “adopt” the expected behavior or risk failing in their chosen field. 
 
If you want to learn more about Dr. Hofstede’s Cultural Dimensions theory, you can contact us, or you can visit Geert Hofstede site here  http://geert-hofstede.com/national-culture.html
 
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