Article Summary: “Economic Man in Cross-Cultural Perspective” by many

Title: Economic Man in Cross-Cultural Perspective: Behavioral Experiments in 15 Small-Scale Societies
Author: Henrich, Boyd, Bowles, Gintis and many others
Scope: 3 stars
Readability: 2.5 stars
My personal rating: 5 stars
See more on my book rating system.

Topic of Article

A study of 15 non-Industrialized societies to test whether humans make distributional decisions based primarily upon rational self-interest.

My Comments

The list of authors is a virtual “Who’s Who” within the field of Cultural Evolution.

They create a solid experiment to test the extent to which humans make decisions based upon rational self-interest. This study is part of a growing literature which argues that humans are far less self-interested than economists assume. A entire new branch of economics named behavioral economists attempts to base the field of economics on less stringent assumptions.

Key Take-aways

  • The assumption made by economists and some other disciplines that humans make self-interested decisions is unfounded.
  • People, particularly those who live in market economies, are often willing to do what they believe is fair even if it goes against their self-interest.
  • Ironically, Hunter Gatherers and members of other relatively simple societies without widespread market exchange are far more self-interested in their behavior.
  • This suggests that people living in simpler societies are not more generous, they are just more fearful of being caught not sharing and then being punished by the group.

Important Quotes from Book

Researchers from across the social sciences have found consistent deviations from the predictions of the canonical model of self-interest in hundreds of experiments from around the world. This research, however, cannot determine whether the uniformity results from universal patterns of human behavior or from the limited cultural variation available among the university students used in virtually all prior experimental work. To address this, we undertook a cross-cultural study of behavior in ultimatum, public goods, and dictator games in a range of small-scale societies exhibiting a wide variety of economic and cultural conditions. We found, first, that the canonical model – based on self-interest – fails in all of the societies studied. Second, our data reveal substantially more behavioral variability across social groups than has been found in previous research. Third, group-level differences in economic organization and the structure of social interactions explain a substantial portion of the behavioral variation across societies: the higher the degree of market integration and the higher the payoffs to cooperation in everyday life, the greater the level of prosociality expressed in experimental games. Fourth, the available individual-level economic and demographic variables do not consistently explain game behavior, either within or across groups. Fifth, in many cases experimental play appears to reflect the common interactional patterns of everyday life.

Experimental economists and others have uncovered large, consistent deviations from the textbook predictions of Homo economicus (Camerer 2003; Fehr et al. 2002; Hoffman et al. 1998; Roth 1995). Hundreds of experiments in dozens of countries, using a variety of game structures and experimental protocols, have suggested that in addition to their own material payoffs, students care about fairness and reciprocity and will sacrifice their own gains to change the distribution of material outcomes among others, sometimes rewarding those who act prosocially and punishing those who do not. Initial skepticism about such experimental evidence has waned as subsequent studies involving high stakes and ample opportunity for learning have repeatedly failed to modify these fundamental conclusions.

This multitude of diverse experiments creates a powerful empirical challenge to what we call the selfishness axiom – the assumption that individuals seek to maximize their own material gains in these interactions and expect others to do the same.1 However, key questions remain unanswered. Do such consistent violations of the canonical model provide evidence of universal patterns that characterize our species? Or, do individuals’ economic and social environments shape their behavior, motivations, and preferences? If so, are there boundaries on the malleability of human nature, and which economic and social conditions are most involved? Are there cultures that approximate the canonical account of purely self-regarding behavior? Are inclinations towards fairness (equity) and “tastes” for punishing unfairness better explained statistically by individuals’ attributes such as their sex, age, education, and relative wealth, or by the attributes of the individuals’ group?

Existing research cannot answer such questions because virtually all subjects have been university students.

To broaden this inquiry, we undertook a large cross-cultural study using ultimatum, public goods, and dictator games. Twelve experienced field researchers, working in 12 countries on four continents and New Guinea, recruited subjects from 15 small-scale societies exhibiting a wide variety of economic and social conditions. Our sample of societies consists of three groups of foragers, six groups of slash-and-burn horticulturalists, four groups of nomadic herders, and two groups of small-scale agriculturalists.

Our overall results can be summarized in five major points: first, there is no society in which experimental behavior is fully consistent with the selfishness axiom; second, there is much more variation between groups than previously observed, although the range and patterns in the behavior indicate that there are certain constraints on the plasticity of human sociality; third, differences between societies in market integration and the local importance of cooperation explain a substantial portion of the behavioral variation between groups; fourth, individual-level economic and demographic variables do not consistently explain behavior within or across groups; and fifth, experimental play often reflects patterns of interaction found in everyday life.

The three experiments we deployed, the ultimatum game (UG), dictator game (DG), and public goods game (PGG), have been extensively studied among students in complex market societies.

The UG is a simple bargaining game that has been extensively studied. In this game, subjects are paired and the first player, often called the “proposer,” is provisionally allotted a divisible “pie” (usually money). The proposer then offers a portion of the total pie to a second person, called the “responder.” The responder, knowing both the offer and the amount of the pie, can then either accept or reject the proposer’s offer. If the responder accepts, he receives the offer and the proposer gets the remainder (the pie minus the offer). If the responder rejects the offer, then neither receives anything. In either case, the game ends; the two subjects receive their winnings and depart.

The DG is the same as the UG, except that responders are not given an opportunity to reject – they simply get whatever the proposer dictates.

In proposing this project, we hypothesized that differences in economic organization and independence, social organization (complexity), and market integration may influence cultural transmission and create between-group differences in notions of fairness and punishment. To test these initial hypotheses, we rank ordered our societies along five dimensions.

First, payoffs to cooperation (PC): To what degree does economic life depend on cooperation with non-immediate kin?

Second, market integration (MI): Do people engage frequently in market exchange?

Third, anonymity (AN): How important are anonymous roles and transactions?

Fourth, privacy: How well can people keep their activities secret from other?

Fifth, sociopolitical complexity (SC): How much decision making occurs above the levelof the household?

Finally, settlement size (SS)

Four of these indices – market integration, anonymity, social complexity, and settlement size – are highly correlated across groups, suggesting that they may all result from the same underlying causal process.

To capture the causal effects of this nexus of variables, we created a new index of “aggregate market integration” (AMI) by averaging the ranks of MI, SS, and SC. (We did not include AN because it is so similar to MI, and including it has only a slight effect.) We estimated ordinary least squares regression equations for explaining group mean UG offers using the PC and AMI…  Together these two variables account for 47% (adjusted R2) of the variance among societies in mean UG offers.

Related Books

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s