Nice little article introducing neuro-economics

[Rduke55]

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Hijack time.

Rduke:

How, in your opinion, should this discovery be applied? [img]/images/graemlins/smile.gif[/img]

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That's a good question and I'm not sure.

Of course I'd imagine it's useful for insight into some mental disorders.
Outside of that, the talks I went to was put on by our law school so I'd guess that they think there may be applications there.

[Propertarian]

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The proposed situation in the article is SINGULAR. Non-iterated. The tendency for people to turn down any quantity, assuming that this action will have no impact on the future, is irrational.

However, I agree that it's a poor analog of economics.

[/ QUOTE ] We agree-surprise, surprise.

Neoclassical economics doesn't take ideas of fairness and reciprocity and their effects on iterated transactions into place.

[hmkpoker]

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It would be equally preposterous to think that any such nature is static.

[/ QUOTE ] Correct; mutation and natural selection are the only constants in human nature i.e. a very slow process of change is the only constant.

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I disagree.

Human beings are capable of rational logic, and frequently do not exercise it because it is overrun by emotional mechanisms that evolved for survival in a primitive world, as OP demonstrates.

However, the awareness of these mechanisms gives one the ability to change them. It is instinctive for an individual to feel inferior in the face of another's success, and accordingly act competitively, enmiring oneself in work, debt and misery. However, the awareness that this isn't really going to get you anywhere and that happiness is much, much easier to secure through other methods (having like-minded friends, lowering material expectations, doing things you like, not giving a [censored] about what other people think) gives anyone the power to override the animal instinct.

The beauty of psychology is that it gives the seeing eye the ability to see itself.

[Propertarian]

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Outside of that, the talks I went to was put on by our law school so I'd guess that they think there may be applications there.

[/ QUOTE ] I'm sure their is an application, and the prevailing economic theory is of course influential on public policy but I imagnine this talk was put on in the law school because of a legal theory called " Law and Economics", which uses the neoclassical models being falsified by neuro-economics.

[Propertarian]

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I disagree.

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Not exactly; mutation and natural selection also gave us rational logic, of course. And shapes whether we will use it or not, how it works, and who will use it.

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However, the awareness that this isn't really going to get you anywhere and that happiness is much, much easier to secure through other methods (having like-minded friends, lowering material expectations, doing things you like, not giving a [censored] about what other people think) gives anyone the power to override the animal instinct.

[/ QUOTE ] I strongly disagree with this; I can think of many examples of people who were aware of the orgin of urges (e.g. people well versed in evolutionary theory who are overweight because of overeating or pursuing relative status or at least distraught about not doing so) who can't seem to stop performing the action.

Furthermore, the emotional traits you talk about often bring people disutility if they don't perform the action traditionally used to satiate the passion. They might not perform the action that the emotion urges them to perform, but the emotion is still their, nagging away at their concious and subconcious.

[hmkpoker]

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Not exactly; mutation and natural selection also gave us rational logic, of course. And shapes whether we will use it or not, how it works, and who will use it.

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True, but my point was that the results of evolution are now more useful to survival than evolution itself. Consider civilization; the welfare of humankind is influenced far more greatly by the social norms we implement rather than the results of natural selection.

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I strongly disagree with this; I can think of many examples of people who were aware of the orgin of urges (e.g. people well versed in evolutionary theory who are overweight because of overeating or pursuing relative status or at least distraught about not doing so).

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Your position is that the knowledge of a pertinent biological mechanism does not affect someone's behavior? [img]/images/graemlins/confused.gif[/img]

So, the knowledge of long-term damage by cigarrette smoking does not create a disincentive to smoke cigarettes? The knowledge that excessive cocaine use leads to overdose doesn't create a disincentive to slow down? The knowledge that alcohol-related dehydration leads to hangover does not create an incentive to drink lots of water after a party?

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Furthermore, the emotional traits you talk about often bring people disutility if they don't perform the action traditionally used to satiate the passion. They might not perform the action that the emotion urges them to perform, but the emotion is still their, nagging away at their concious and subconcious.

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My brother stopped his pack-a-day habit a year ago. He said it really sucked, but he knew it was something he had to do. Contrast this with a rab rat who, given the ability to administer nicotine, cocaine or morphine injections, will keep administering until it OD's. Care to explain?

[Propertarian]

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Your position is that the knowledge of a pertinent biological mechanism does not affect someone's behavior?

[/ QUOTE ] No, it does effect that person's behavior. This situation extremely complex; way more complex than you are portraying it.

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Consider civilization; the welfare of humankind is influenced far more greatly by the social norms we implement rather than the results of natural selection.


[/ QUOTE ] This of course presupposes that the norms we implement are not also largely a product of natural selection.

Also, many social norms (e.g. norms against adultery or premartial sex in the past in our society) have been imperfectly followed-to say the least-because those norms are contrary to the impulses and behaviors that natural selection have given us. Just because a social norm exists does not mean it will be followed.
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My brother stopped his pack-a-day habit a year ago. He said it really sucked, but he knew it was something he had to do. Contrast this with a rab rat who, given the ability to administer nicotine, cocaine or morphine injections, will keep administering until it OD's. Care to explain?

[/ QUOTE ] Obviously this occurs. In the paragraph you quoted I admitted, more or less, that some people some of the time will not perform behaviors that emotions that have been selected by evolution "intend" for them to perform. Once again, it is simply the case that I don't think the subject we are discussing is as simple as "we understand psychology and evolution so can conquer it in a mind over matter scenario".

[hmkpoker]

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This of course presupposes that the norms we implement are not also largely a product of natural selection.

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I'm tempted to argue that laws change a little too quickly to be naturally selected, although, perhaps natural selection of social norms does occur, just in a different way (since it isn't biological data that's being replicated.) This is an interesting idea, I'll have to think about it some other time.

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Obviously this occurs. In the paragraph you quoted I admitted, more or less, that some people some of the time will not perform behaviors that emotions that have been selected by evolution "intend" for them to perform. Once again, it is simply the case that I don't think the subject we are discussing is as simple as "we understand psychology and evolution so can conquer it in a mind over matter scenario".

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The actual processes are difficult to impossible to measure, but I think the principle of increased availability of information leading to better choices is pretty sound.

[Borodog]

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This scenario becomes precisely clear when we realize that it is exactly symmertic, i.e. it does not matter which person is "given" the $10 initially; both players must agree on the split for either to be paid. The only possible rational solution is to offer and accept only $5.

Any player who accepts less than $5 has not thought about the game thoroughly (and hence is not "perfectly rational", in the game theoretic sense).

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I'm confused as to why you're so fired up about this.

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I'm not really "fired up", per se. I'm just not sure what the big deal is. Austrians like Mises, Rothbard, and Hoppe and Hoppe in particular have been saying things like this for decades, although without the (I think incredibly useful and enlightening) evolutionary angle.

[Borodog]

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The human reaction, though, is exactly what we expect, because there is a selective advantage to fairness, because in the real world (the economic world)these "games" are almost never single. Almost all economic interactions are "iterated"; hence there is a selective advantage to holding out for "fairness", even if the individual doesn't consciously realize it. This is NOT in conflict with any economic analysis. Essentially, what I'm saying is that the "sense of righteous indignation at unfairness" acts to lower the individual's time preference.

This: "Our ancestors were better at surviving if they were bloody-minded." is particularly stupid. The article is making the point that it is precisely the fair, and those that hold out for fairness that are better at surviving, not the "bloody-minded."


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This is true, but note that fairness is not useful in the modern (capitalist) world.

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What color is the sky in Crazy World?

What happens to economic exchangers who habitually do not act fairly to the other party to the exchange?

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I'm referring to fairness of result, not fairness of opportunity. In tribal anarchy, one who produces a lot has his resources consumed by the tribe...of course, this isn't a problem with small populations, since your tribe members are your closest friends and family.

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"Fairness of results", I suspect, is a rather different matter entirely. As you yourself have pointed out, we have to be indoctrinated with years of school to believe that what matters is relative wealth, "fairness of results."

The sense of "righteous indignation at being treated unfairly" is an extremely useful thing in society. It fosters cooperation, specialization, and the division of labor.

I don't think people naturally believe that it is "unfair" that others who have more material wealth than them (although there are of course pathological cases); that's a cultural thing; people have to be taught it. Which is exactly what happened in places like Haiti.

However, that doesn't mean that people (usually states) don't take advantage of the sense of "righteous indignation at being treated unfairly". I bolded "treated" because I think it's the crucial word. Middle Eastern government rile up hatred against the United States by telling them not that the Americans are free (cause you know, they all hate freedom over there), but that America does not treat fairly with Moslem nations. In fact most of the rest of the world does the same thing. It doesn't help matters, f course, that very often the US government doesn't treat fairly.

The fact that America is materially wealthy is only used as a signal to show that she must have gotten that way by "exploiting" the rest of the world, i.e. treating unfairly. Nobody gets upset at the obvious idea of "if you produce more, you have more." Except of course pathological cases like Propertarian.