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If it pays to be greedy why humans cooperate

slo1
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8/5/2013 8:28:18 AM
Posted: 3 years ago
An excerpt from the below article.

http://www.bloomberg.com...

Why Homo Economicus Might Actually Be an Idiot

The idea that biological competition favors the greedy, creating the ultrarational and incentive-driven Homo economicus, remains at the core of the models economists use to understand the world. It is taught to millions of students and informs the decisions of the planet"s most powerful policy makers.
Problem is, the "hard-headed," supposedly scientific take on human behavior bears little relation to reality. An overwhelming body of research demonstrates that helping behaviors (or, as economists like to say, "other-regarding preferences") are the norm in human interactions around the globe. This raises the question: If it really does pay to be greedy, why do humans act differently?
So far, there"s no definitive answer. But there is some evidence that rational self-interest isn"t always the best strategy. In conditions of harsh competition, Homo economicus might not prevail.
slo1
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8/5/2013 8:36:54 AM
Posted: 3 years ago
I forgot this great line from the article.

The take-home point is that Homo economicus is an oversimplified caricature who, in many situations, fails to benefit from real possibilities. Greed isn"t good, as Gordon Gekko famously said in the film "Wall Street." In many cases, it"s not even very smart.
slo1
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8/5/2013 8:52:37 AM
Posted: 3 years ago
While there is a complete line of discussion that is fascinating that ultimately challenges capitalism versus socialism.

Game theory shows that internal motivations can change outcomes when measured as a group. Obviously the dynamics are completely changed when social and government structures mandate various behaviors.

It is an interesting concept and for those that think that the best way has been uncovered we are just starting to dive into understanding how individuals collectively create the group outcome. If we have an open mind we just might be surprised.

As a side note, I do find it interesting that many modern economic theories do not include much from game theory.

Human economic behaviors are often thought as linear in economic theory. IE: Consumer spending related to discretionary income. What are the prevailing thoughts on the difference between the savings amounts of the Chinese versus the Americans and why? Are there any social structure measures like "fear" that motivate savings. IE: those who went through great depression versus Baby Boomers Gen X'ers who have it high on the hog?
DanT
Posts: 5,693
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8/5/2013 10:56:35 AM
Posted: 3 years ago
At 8/5/2013 8:28:18 AM, slo1 wrote:
An excerpt from the below article.

http://www.bloomberg.com...


Why Homo Economicus Might Actually Be an Idiot

The idea that biological competition favors the greedy, creating the ultrarational and incentive-driven Homo economicus, remains at the core of the models economists use to understand the world. It is taught to millions of students and informs the decisions of the planet"s most powerful policy makers.
Problem is, the "hard-headed," supposedly scientific take on human behavior bears little relation to reality. An overwhelming body of research demonstrates that helping behaviors (or, as economists like to say, "other-regarding preferences") are the norm in human interactions around the globe. This raises the question: If it really does pay to be greedy, why do humans act differently?
So far, there"s no definitive answer. But there is some evidence that rational self-interest isn"t always the best strategy. In conditions of harsh competition, Homo economicus might not prevail.


There is a difference between being greedy, and acting in one's own interest. It is perfectly fine to give some of your discretionary to charity. It is not OK for your donations to exceed your discretionary income.

Disposable income = Y - T
Discretionary income = Y - (C + T)

There is also a huge difference between charity, and government spending.
"Chemical weapons are no different than any other types of weapons."~Lordknukle
slo1
Posts: 4,353
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8/5/2013 1:45:33 PM
Posted: 3 years ago
At 8/5/2013 10:56:35 AM, DanT wrote:
At 8/5/2013 8:28:18 AM, slo1 wrote:
An excerpt from the below article.

http://www.bloomberg.com...


Why Homo Economicus Might Actually Be an Idiot

The idea that biological competition favors the greedy, creating the ultrarational and incentive-driven Homo economicus, remains at the core of the models economists use to understand the world. It is taught to millions of students and informs the decisions of the planet"s most powerful policy makers.
Problem is, the "hard-headed," supposedly scientific take on human behavior bears little relation to reality. An overwhelming body of research demonstrates that helping behaviors (or, as economists like to say, "other-regarding preferences") are the norm in human interactions around the globe. This raises the question: If it really does pay to be greedy, why do humans act differently?
So far, there"s no definitive answer. But there is some evidence that rational self-interest isn"t always the best strategy. In conditions of harsh competition, Homo economicus might not prevail.


There is a difference between being greedy, and acting in one's own interest. It is perfectly fine to give some of your discretionary to charity. It is not OK for your donations to exceed your discretionary income.

Disposable income = Y - T
Discretionary income = Y - (C + T)

There is also a huge difference between charity, and government spending.

I hear you. Greedy is probably not the appropriate word. I also agree that when it comes to social giving that it generally is not helpful to give more resources than what you need for your own living. On the other hand, I challenge you to think of this more than charitable giving as to how it works today. (You give monies to a large organization that has 100% control of it and you largely will not benefit from the charity).

Are there social situations where giving more than what your means are will pay off for you in the long run? I imagine there are instances in a tighter knit community where it would.
wrichcirw
Posts: 11,196
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8/5/2013 2:04:33 PM
Posted: 3 years ago
At 8/5/2013 1:45:33 PM, slo1 wrote:
At 8/5/2013 10:56:35 AM, DanT wrote:

Are there social situations where giving more than what your means are will pay off for you in the long run? I imagine there are instances in a tighter knit community where it would.

If so, then the gift was motivated out of self-interest, yes?
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
slo1
Posts: 4,353
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8/5/2013 3:04:10 PM
Posted: 3 years ago
At 8/5/2013 2:04:33 PM, wrichcirw wrote:
At 8/5/2013 1:45:33 PM, slo1 wrote:
At 8/5/2013 10:56:35 AM, DanT wrote:

Are there social situations where giving more than what your means are will pay off for you in the long run? I imagine there are instances in a tighter knit community where it would.

If so, then the gift was motivated out of self-interest, yes?

I think the standard thought is that altruism does not exist. What decision is made that does not consider self-interest? This study was pertaining to whether people will choose "greedy" self interest behaviors even when it comes to the detriment of other individuals or groups or will they choose less "greedy" behaviors that are beneficial to others, but at greater cost to themselves.

Some questions in economic terms of business. Could it be better to pay better wages/benefits higher than market wages. IE: Costco versus Sam's Club.

Is it better to post calorie counts on national menus or hide it? McDonalds/Panera versus Burger King and most other restaurants.

Is it better to pay for superior but costly waste disposal methods that exceed regulations or just toe the regulation line. I'm not certain of examples of this, but I imagine there are many.
wrichcirw
Posts: 11,196
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8/5/2013 11:07:38 PM
Posted: 3 years ago
At 8/5/2013 3:04:10 PM, slo1 wrote:
At 8/5/2013 2:04:33 PM, wrichcirw wrote:
At 8/5/2013 1:45:33 PM, slo1 wrote:
At 8/5/2013 10:56:35 AM, DanT wrote:

Are there social situations where giving more than what your means are will pay off for you in the long run? I imagine there are instances in a tighter knit community where it would.

If so, then the gift was motivated out of self-interest, yes?

I think the standard thought is that altruism does not exist. What decision is made that does not consider self-interest? This study was pertaining to whether people will choose "greedy" self interest behaviors even when it comes to the detriment of other individuals or groups or will they choose less "greedy" behaviors that are beneficial to others, but at greater cost to themselves.

Some questions in economic terms of business. Could it be better to pay better wages/benefits higher than market wages. IE: Costco versus Sam's Club.

Is it better to post calorie counts on national menus or hide it? McDonalds/Panera versus Burger King and most other restaurants.

Is it better to pay for superior but costly waste disposal methods that exceed regulations or just toe the regulation line. I'm not certain of examples of this, but I imagine there are many.

I think you are changing the parameters inherent in the article. The article does NOT assume that altruism does not exist:

"Some of the players acted in pure self-interest, while others had the potential to care about their counterparts" payoffs.

"The cooperative types tended to cluster and interact with one another preferentially, thereby benefiting from each other"s selfless behavior."


There's a Jewish Passover proverb that is almost picture perfect what this study is attempting to quantify:
http://en.wikipedia.org...

Personally, I think the article just confuses the concept of self-interest. It may be wholly in someone's self-interest to consider the welfare of others, for example, a government lowering taxes to encourage economic activity, or feeding others with the expectation of being fed yourself.
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
wrichcirw
Posts: 11,196
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8/5/2013 11:56:22 PM
Posted: 3 years ago
At 8/5/2013 11:07:38 PM, wrichcirw wrote:
At 8/5/2013 3:04:10 PM, slo1 wrote:

Personally, I think the article just confuses the concept of self-interest. It may be wholly in someone's self-interest to consider the welfare of others, for example, a government lowering taxes to encourage economic activity, or feeding others with the expectation of being fed yourself.

...or doing good deeds with the expectation of getting into heaven. etc...
At 8/9/2013 9:41:24 AM, wrichcirw wrote:
If you are civil with me, I will be civil to you. If you decide to bring unreasonable animosity to bear in a reasonable discussion, then what would you expect other than to get flustered?
slo1
Posts: 4,353
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8/6/2013 8:40:52 AM
Posted: 3 years ago
At 8/5/2013 11:07:38 PM, wrichcirw wrote:
At 8/5/2013 3:04:10 PM, slo1 wrote:
At 8/5/2013 2:04:33 PM, wrichcirw wrote:
At 8/5/2013 1:45:33 PM, slo1 wrote:
At 8/5/2013 10:56:35 AM, DanT wrote:

Are there social situations where giving more than what your means are will pay off for you in the long run? I imagine there are instances in a tighter knit community where it would.

If so, then the gift was motivated out of self-interest, yes?

I think the standard thought is that altruism does not exist. What decision is made that does not consider self-interest? This study was pertaining to whether people will choose "greedy" self interest behaviors even when it comes to the detriment of other individuals or groups or will they choose less "greedy" behaviors that are beneficial to others, but at greater cost to themselves.

Some questions in economic terms of business. Could it be better to pay better wages/benefits higher than market wages. IE: Costco versus Sam's Club.

Is it better to post calorie counts on national menus or hide it? McDonalds/Panera versus Burger King and most other restaurants.

Is it better to pay for superior but costly waste disposal methods that exceed regulations or just toe the regulation line. I'm not certain of examples of this, but I imagine there are many.

I think you are changing the parameters inherent in the article. The article does NOT assume that altruism does not exist:

"Some of the players acted in pure self-interest, while others had the potential to care about their counterparts" payoffs.

"The cooperative types tended to cluster and interact with one another preferentially, thereby benefiting from each other"s selfless behavior."


There's a Jewish Passover proverb that is almost picture perfect what this study is attempting to quantify:
http://en.wikipedia.org...

Personally, I think the article just confuses the concept of self-interest. It may be wholly in someone's self-interest to consider the welfare of others, for example, a government lowering taxes to encourage economic activity, or feeding others with the expectation of being fed yourself.

I'm not certain why we are writing about altruism. I believe the intent of the article is to question the prevalent though that societal and economic systems work the best when individuals make the choice which benefits them the most.

I go back to Costco which pays $45K verus Sam's Club which pays $17K to employees. The CEO of Costco publicly stated his support for raising the national min wage. Paying employees that much flies right in the face of contemporary capitalistic though, yet Costco is doing extremely well.

The parable seems to fit well with the article.
ConservativeAmerican
Posts: 1,676
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8/8/2013 12:00:42 AM
Posted: 3 years ago
At 8/5/2013 8:28:18 AM, slo1 wrote:
An excerpt from the below article.

http://www.bloomberg.com...


Why Homo Economicus Might Actually Be an Idiot

The idea that biological competition favors the greedy, creating the ultrarational and incentive-driven Homo economicus, remains at the core of the models economists use to understand the world. It is taught to millions of students and informs the decisions of the planet"s most powerful policy makers.
Problem is, the "hard-headed," supposedly scientific take on human behavior bears little relation to reality. An overwhelming body of research demonstrates that helping behaviors (or, as economists like to say, "other-regarding preferences") are the norm in human interactions around the globe. This raises the question: If it really does pay to be greedy, why do humans act differently?
So far, there"s no definitive answer. But there is some evidence that rational self-interest isn"t always the best strategy. In conditions of harsh competition, Homo economicus might not prevail.


This is implying that most humans are logical, rational actors who have not been indoctrinated to believe in altruism.
ConservativeAmerican
Posts: 1,676
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8/8/2013 12:06:35 AM
Posted: 3 years ago
At 8/8/2013 12:00:42 AM, ConservativeAmerican wrote:
At 8/5/2013 8:28:18 AM, slo1 wrote:
An excerpt from the below article.

http://www.bloomberg.com...


Why Homo Economicus Might Actually Be an Idiot

The idea that biological competition favors the greedy, creating the ultrarational and incentive-driven Homo economicus, remains at the core of the models economists use to understand the world. It is taught to millions of students and informs the decisions of the planet"s most powerful policy makers.
Problem is, the "hard-headed," supposedly scientific take on human behavior bears little relation to reality. An overwhelming body of research demonstrates that helping behaviors (or, as economists like to say, "other-regarding preferences") are the norm in human interactions around the globe. This raises the question: If it really does pay to be greedy, why do humans act differently?
So far, there"s no definitive answer. But there is some evidence that rational self-interest isn"t always the best strategy. In conditions of harsh competition, Homo economicus might not prevail.


This is implying that most humans are logical, rational actors who have not been indoctrinated to believe in altruism.

Human nature is not in everyone's best interest and does not equate to logic, rape is human nature, is rape thereby logical?

This explains why it might be in every human's nature (after being indoctrinated to believe in altruism, I can argue easily argue that most forms of altruism are taught, not natural) to be altruist or help others, but that doesn't mean it's in their best benefit. If we just followed our impulses all the time without using reason, what would separate us from animals and how would we have accomplished anything more than animals?
Beginner
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8/8/2013 4:08:34 AM
Posted: 3 years ago
Humanity has only been able to survive because of its ability to specialize, cooperate and dominate as a specie, not as individual units. This is why civilization has become the dominant infrastructure in which humanity lives.
Humans behave in ways that benefit both itself and its specie as a whole. Some behave more in favor of the former, others do so for the latter. The development of this type of behavior complements the development of cohesive units of human society.
^My theory.
Senpai has noticed you.
CarefulNow
Posts: 780
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8/15/2013 4:58:18 PM
Posted: 3 years ago
There is altruism that can be reduced to individual self-interest, such as reciprocal altruism; and altruism that cannot, such as kin-selected altruism. Reason is a separate issue; one may apply reason to self-service or group-service, or act upon selfish or altruistic instincts. Cooperation, too, is a separate issue; it's individually rational in any positive-sum game in which it can be enforced. The atomized, individually rational Homo economicus, is thus an oversimplification in three different ways.