Slicing the Economic Pie

Thursday, March 20, 2008

By Wray Herbert

I grew up with a brother who was very close to me in age, and we were both hyper vigilant about getting our fair share. No matter what was at stake. That meant no more than our fair share of chores and responsibilities, and certainly no less than our fair share of privileges and rewards. My mother had all sorts of clever tricks for dealing with this constant competitiveness.If we were bickering over a last piece of pie, for example, she would randomly pick one of us to cut the slice of pie in half. But before the cutting started she would add: “And your brother gets to choose the slice he wants.”

Damn. With those few words, she took all the fun out of holding the knife, and indeed she probably shifted the competitive advantage. In any case, she made a muddle of self-interest and fairness in our young minds.

Well, it turns out my mother didn’t invent the pie-slicing gambit. But she was buying into a fairly cynical view of life, assuming that we all act like rational calculating machines, governed entirely by utilitarian self interest. But is this true? Is fairness simply a ruse, something we adopt only when we secretly see an advantage in it for ourselves? And do we expect no more than self-interest of others? Or is there such a thing as fairness for fairness’ sake?

Many psychologists have in recent years moved away from the purely utilitarian view, dismissing it as too simplistic. But the trick is in actually demonstrating genuine fairness in action, uncontaminated by self-serving motives like greed and need. Recent advances in both cognitive science and neuroscience now allow psychologists to approach this question in some different ways, and they are getting some intriguing results.

UCLA psychologist Golnaz Tabibnia and colleagues used a classic psychological test called the “ultimatum game" to explore fairness and self-interest in the laboratory. In this particular version of the test, Person A has a pot of money, say $23, which he can divide in any way he wants with Person B. All Person B can do is look at the offer and accept or reject it; there is no negotiation. If he walks away from the deal, there is no deal. In the actual experiment, there is no real Person A: It’s secretly the experimenter, making a range of offers, from generous to fair to stingy. The experimental subjects get to weigh the offers and respond.

Whatever Person A offers to Person B is an unearned windfall, even if it’s a miserly $5 out of $23, so a strict utilitarian would take the money and run. But that’s not exactly what happens in the laboratory. The UCLA scientists ran the experiment so sometimes $5 was stingy and other times fair, say $5 out of a total stake of $10. The idea was to make sure the subjects were responding to the fairness of the offer, not to the amount of the windfall. When they did this, and asked the subjects to rate themselves on a scale from happy to contemptuous, they had some interesting findings: Even when they stood to gain exactly the same dollar amount of free money, the subjects were much happier with the fair offers and much more disdainful of deals that were lopsided and self-centered. Indeed, many people actually reject very unfair deals, even though they are losing cash out of pocket, suggesting that their sense of decency is trumping their rational, calculating mind. They are responding emotionally to the idea that someone would hoodwink them.

That’s interesting in itself. But it could simply mean that we don’t like being treated shabbily, which wouldn’t be all that surprising. The psychologists want to know if, beyond that, there is something inherently rewarding about being treated decently. They decided to look inside the brains of these people to find out. They scanned several parts of their brains involved in aversion and reward while the subjects were in the act of weighing both fair and miserly offers, and they found that, yes, both parts of the brain light up during the ultimatum game. As reported in the April issue of the journal Psychological Science, the brain finds self-serving behavior emotionally unpleasant, but a different bundle of neurons also finds genuine fairness uplifting. What’s more, these emotional firings occur in brain structures that are fast and automatic, so it appears that the emotional brain is overruling the more deliberate, rational mind. Faced with a conflict, the brain’s default position is to demand a fair deal.

So unfairness is fundamentally jarring to the brain, and fairness is fundamentally rewarding. Yet people do accept offers every day in real life that are less than equitable, and indeed they did so in this experiment. When the scientists scanned the brains of those who were “swallowing their pride” for the sake of cash, the brain showed a distinctive pattern of neuronal firing. It appears
that the unconscious mind can temporarily damp down the brain’s contempt center, in effect allowing the rational, utilitarian brain to rule, at least momentarily. So it seems contempt does not go away when the economic pie is sliced unfairly, it just goes underground.

For more insights into the quirks of human nature, visit “We’re Only Human . . .” at

posted by Wray Herbert @ 1:35 PM


At 9:04 AM , Anonymous Anonymous said...

There is an aspect to this study that is not discussed. By have one person with money who MUST share that money with someone even though there is no aspect of earning the money, leads the participants to accept that those with money are obligated to share with those who do not have money. Also the sharing must be "fair."

There is something a little sick about that premise.

At 8:38 AM , Blogger Jeremy Masten said...

I just wanted to say that I've been reading your column for about a year now, and I really appreciate what you do.

At 12:03 PM , Blogger Devender said...

Hi, In the case of people who were "swallowing there pride" for the sake of cash, was there any study done to find out say after a few hours did they still feel contempt ? how long does the mind damp down the contempt center ?


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