"Genetic Basis To Fairness, Study Hints"
by Nicolas Wade

Source: The New York Times, September 18, 2003.
http://query.nytimes.com/gst/fullpage.html?sec=health&res=9E06EFDC153AF93BA2575AC0A9659C8B63

             In Chapter 4, we saw that a market economy relies upon the self-interested behavior of people trading goods and services in markets in order to determine what to produce, how to produce, and how to distribute these products. Adam Smith's invisible hand, which relies on price mechanisms and competition, keeps our greedy behavior in check. For example, business would like to charge exorbitant prices, but if competitors offer a product for cheaper, customers will search out the better bargain. Economic models focus on the selfish side of human behavior as the best way to bring about an efficient use of resources.

             What is efficient may not, however, seem "fair."  We live in a mixed economy, not a purely market economy, because our society often balances concerns with economic efficiency with concerns about equity. This New York Times article, summarizing research in the science journal Nature, implies that this concern with fairness may be just as natural as acting on self-interest. The capuchin monkeys in this experiment evaluated trades according to an innate sense of fairness. Each made "inter-personal comparisons," meaning that she compared her gains to that of the other monkey. One monkey who received a cucumber refused to eat it because it was not as good as the grape received by her companion. According to the article, "protesting unfair treatment" may have a genetic basis common to all primates (including us)!

             The researchers conclude from this behavior that cooperation may be as important to the survival of a species as competition. Unless the distribution of the product is perceived as fair by all concerned, the social group may not prosper.

             The behavior of the monkeys may also help explain why the assumptions of consumer theory (Chapter 19) are hard to reconcile with our gut reactions to prices we think of as "too high." As your textbook explains at the end of the chapter, if you are really thirsty, you might pay a high price, perhaps $1.50, for a can of soda. In a free market economy, no one could force you to fork over the money. If you bought it, your behavior implies that it was worth the price to you at that moment. In the language of consumer theory, the marginal utility gained was at least the $1.50 you sacrificed to buy the soda. But, if the usual price for a soda was only $1.00 per can, you still might feel that the transaction was unfair, even though you made a decision to pay the higher price.

             In Chapter 15, you will learn about a school of economists called the economic behaviorists who are challenging the notion that humans are solely motivated by rational self-interest. How might our view of how economies work change if other psychological motivations were included in our theory? This is an important area of research for twenty-first century economists.

• Why did the researchers use female monkeys for their experiment? How did the social environment affect male versus female monkeys' willingness to share with others?
• What kind of behavior do we expect of people within their own families?
• Can you think of an example of an economic transaction you participated in that seemed unfair to you? What seemed unfair about it?
• Where do our ideas about fairness come from?
• Is it natural to act competitively? Is it natural to act cooperatively?