When folk try to apply the scientific method to the study of how folk
behave, interact and respond – broadly, the social sciences, including
psychology and economics, among diverse others – I notice a tendency to
try to put the subjects into an isolated system
so as to eliminate
extraneous externalities. This is an understandable attempt to emulate what
the physical sciences do in experiments; but it it subject to perilous
complications because, in fact, human beings always deal with the experimental
set-up in terms that interpolate – however unwittingly – some
social context. The experimenter tries to so set things up as to remove the
complications of social context – but it makes no sense to try to do
that, because (almost all) human beings always do operate in some
social context, even if the experimenter has done everything possible to
remove them from their usual social contexts.
Take the ultimatum game
: this has two participants, mutually
anonymous, a sender
and a receiver
. The experimenter has given
the sender (say) twenty valued tokens (e.g. units of money). The sender
divides this into one pile for self and another to be sent to the
receiver. The receiver, on being told how the sender has divided the whole,
gets to chose whether to accept their pile, thereby allowing the sender to
keep the other, or to reject the given offer, in which case the experimenter
takes back all the tokens and neither party gets any.
The orthodox interpretation of this says that, since it's a one-off
transaction and neither party has any idea who the other is, their rational
response to such a situation should be for each to maximise the number of
valued tokens received; the sender shall keep as many as allowed for self and
give as few as permitted to receiver, who shall accept anything rather than
nothing. In practice, participants don't do that – unless they've been
indoctrinated by economists into believing that's the right way to
behave. Receivers reject offers that strike them as unfair; and senders,
anticipating this, typically strike a compromise between greed and
fairness. This behaviour is characterised as irrational
– and
this says more about those who so characterise it than about the
participants.
The orthodoxy is ignoring the fact that, quite apart from the situation they are setting up, the participants are exercising general responses that they have learned, as part of the cultures in which they grew up, that are important to how those cultures manage to function and stay healthy. Receivers aren't dependent on the income from participation to survive, so they can afford to give up the benefits of accepting an offer, if it happens to be unfair, in exchange for the subtler benefit that their culture has taught them – that of teaching the sender to behave in a manner more conducive to the general well-being of the society, at large, in which the receiver is living. Even if the receiver shall never have any further interaction with this particular sender, the act of bolstering their ambient society's ability to function well yields a net benefit to the receiver.
Written by Eddy.