February 28, 2003

O Brave New World!

I wrote:

I don't know about you, but in the future I'm only making contracts with people with elevated oxytocin levels... Virginia Postrel writes about those who are beginning to found the subdiscipline of Neuroeconomics: Looking Inside the Brains of the Stingy.

Kieran Healy Responded:

Brad DeLong points to an article by Virginia Postrel about the nascent science of neuroeconomics. There's a lot of experimental work showing that people typically trust each other much more than homo economicus would. In standard bargaining games, where it's rational to stiff the other guy but better (in terms of your prize money) if you both trust each other for a bit, people tend to trust each other. This holds even where experimenters create exchange conditions that positively encourage you to be an asshole -- by removing face-to-face interaction, ensuring anonymity, making the games one-shot deals, and so on.

The new studies look at what happens to the brain chemistry of people playing the game. They find that people who trust show higher levels of the hormone oxytocin. In a different set of studies, the article says researchers, 'receiving low-ball offers stimulates the part of the brain associated with disgust. "They can predict with good reliability, from looking at the brain, what a person will do," said Colin F. Camerer, an economist at the California Institute of Technology. "People whose brains are showing lots of disgust will reject offers."'

There?s an interesting question here about what, exactly, is being explained here. On the one hand, people are of course unaware of their current oxytocin levels and fMRI scan patterns, so it's interesting that we can do a blood test or a brain scan and predict their choice. On the other hand, they're well aware of when they're feeling trusting or disgusted. Those feelings have some biological substrate (it's all happening inside your brain, after all) but how much does it add to say "People whose brains are showing lots of disgust will reject offers"? They're showing lots of disgust because they're disgusted.

This is the sort of levels of explanation/ reductionism/ supervenience stuff that the philosophers are good at clearing up. There's never one around when you need one.

Which led Matthew Yglesias to chime in:

Too true. I was actually supposed to have a seminar session where we were going to discuss this topic (well, an analogous one related to electric fish) on Monday, but the professor never showed up (he was jetlagged). But yeah, I would say that this bit about the fMRI is a red herring. They already knew where disgust-brain-activity took place, they already knew that lowball offers disgust people, and they already knew that disgusted people reject offers. Rephrasing this in terms of brain patterns doesn't seem to add anything.

To which I reply:

Ha! Your these-are-simply-alternative-frames-of-description ploy is futile! Yes, this is what you say now. But what will you say But what will you say in the future, when the dean's special assistant says, "Time for your oxytocin shots Mr. Healy, Mr. Yglesias" just before you go in to hear her decision on your next year's salaries?

Posted by DeLong at February 28, 2003 09:17 AM | TrackBack

Comments

"I was actually supposed to have a seminar session where we were going to discuss this topic (well, an analogous one related to electric fish) on Monday, but the professor never showed up (he was jetlagged)"

Paging Lawrence Summers. Paging Lawrence Summers. Your faculty is not in control. Your faculty is not in control.

Posted by: Lowell House Dining Room on February 28, 2003 09:23 AM

I'm still trying to wrap my brain about how issues of trust and elevated oxytocin levels in human undergraduates can be considered as analogous to issues of the behavior of electric fish.

Posted by: Cabot House Dining Room on February 28, 2003 09:26 AM

Kieran is overdoing it a bit in talking about what homoeconomicus would or wouldn't do. It always pays to remember that the Nash criterion for an equilibrium is not that strong, and even dominant strategy arguments aren't as soundly based in the fundamental concept of rationality as I'd like them to be.

Posted by: dsquared on February 28, 2003 09:28 AM

It always pays to remember that the Nash criterion for an equilibrium is not that strong, and even dominant strategy arguments aren't as soundly based in the fundamental concept of rationality as I'd like them to be.

That's why I didn't say "people co-operate even though it's irrational", but rather "people co-operate when homo economicus would not".

Posted by: Kieran Healy on February 28, 2003 09:32 AM

Hmm, re-reading my own post from this morning reveals I did use the phrase "where it's rational to stiff the other guy". But what D-Squared said all the same.

Time for my soma shot.

Posted by: Kieran Healy on February 28, 2003 09:37 AM

Let me side with Kieran here against Dsquared. Homo Economicus is defined to be a fictitious being for whom dominant-strategy arguments are bulletproof, and Nash equilibrium is the obvious equilibrium concept...

Posted by: Brad DeLong on February 28, 2003 09:38 AM

Infinitely more portentous, IMHO, are the insights fMRIs are providing about the nucleus accumbens, the part of the brain that gives rise to psychological addiction.

Here is one application of these insights (from www.opportunityservices.com):

"As the Bush adminstration knows, a big part of winning the war on terrorism is convincing potential terrorist recruits and supporters that their interests are being served by America and her allies. People are at their most convinced when they are psychologically addicted. Psychological addiction takes shape in the part of the brain called the nucleus accumbens, which is fired by the prospects of professional success, romance and laughs (PSRL). Increasing PSRL will be the consuming focus of credibly sustainable providers of lifelong learning and career services (LLCS). In particular, these providers will race to develop and fund their own student loan programs, as most customers will need financing in order to consume their initial bundle of LLCS, and will be drawn to the LLCS provider offering the best loan package. These loan programs will, in time, democratize access to LLCS -- and hence, expand prospects of PSRL to all potential terrorist recruits and supporters. So conspicuously turbocharging maturation of the LLCS market should be a big part of the war on terrorism."

(More on this at www.opportunityservices.com)


Posted by: Frank Ruscica on February 28, 2003 11:37 AM

"A Fine New World"

Individuals (17% of the white collar workforce in the US is already taking some form of anti-depressant) will choose to leverage neurotechology tools to enhance their performance just as they have used canals, steam engines, electricity, motorized transportation systems and information technology to make themselves and the organizations they choose to work for more productive.

It is critical to emphasize that workers will themselves choose to use these new tools, rather than them being asked for forced to as a condition of employment.

At the level of the individual, competition is fierce and people know it. It will only take a small minority of people to adopt these tools and then the rest will be forced to adopt and adapt.

Huxley envisioned a dulling of the individual spirit, when in fact, what we will see is a flowering of diversity and a magnification of inherent traits.

Posted by: Zack Lynch on February 28, 2003 12:28 PM

Well if someone told me I was going to get the shock, then that event would itself have consequences for my brain chemistry -- consequences that would quite possibly outweigh the effects of the shot.

Posted by: Matthew Yglesias on February 28, 2003 12:31 PM

>>Homo Economicus is defined to be a fictitious being for whom dominant-strategy arguments are bulletproof, and Nash equilibrium is the obvious equilibrium concept...
<<

Phil Mirowski ("Machine Dreams") agrees with me on this one, and so do the mathematics. Dominant strategy equilibrium isn't entailed by Von Neuman/Morgenstern utility maximisation and Nash's equilibrium condition *certainly* isn't. Both of them have to be added to the system as separate axioms, and von Neumann didn't believe in Nash's condition.

Posted by: dsquared on February 28, 2003 01:04 PM

You could think of other axioms that together with vN-M utility maximization got you to dominant-strategy equilibrium...

But your bigger point is well taken. Game theory is never sure whether it is a positive theory (this is how properly-informed people who understand what is going on will play...), a normative theory (this is how people should play...), or a false-contingency theory (this is how entities which have never existed and never will exist but have the following decision-making structure would play...).

Posted by: Brad DeLong on February 28, 2003 01:37 PM

>>Well if someone told me I was going to get the shot, then that event would itself have consequences for my brain chemistry -- consequences that would quite possibly outweigh the effects of the shot<<

Not if we quadruple your *personal* dose, Mr. Yglesias...

Posted by: Brad DeLong on February 28, 2003 01:38 PM

Phil Mirowski ("Machine Dreams") agrees with me on this one, and so do the mathematics.

Game theory is never sure whether it is a positive theory (this is how properly-informed people who understand what is going on will play...), a normative theory (this is how people should play...), or a false-contingency theory (this is how entities which have never existed and never will exist but have the following decision-making structure would play...).

Yep. I second the plug for Mirowski's book, btw. And seeing as I'd already agreed with dsquared, by transitivity we all agree with one another. Excellent. Now all that remains is to up Matt Yglesias's prescription and harmony will reign forever in the comments section.

Incidentally, that's what the researchers need to do here --- we want to know whether oxytocin can actually cause feelings of sociability and trust and really change the outcomes of games in practice. There's plenty of potential for downwards-causation --- social structure can change your brain chemistry very easily.

Posted by: Kieran Healy on February 28, 2003 03:26 PM

//
It is critical to emphasize that workers will themselves choose to use these new tools, rather than them being asked for forced to as a condition of employment.
//

That is a lie. In the way you say it, there no freedom of choice.

//
At the level of the individual, competition is fierce and people know it. It will only take a small minority of people to adopt these tools and then the rest will be forced to adopt and adapt.
//

Well, in the USA it may be so. And it would be
another reason not to like them. However I think it is another lie, a rationalization of individual behavior that ends in mutual prejudice, just like the panics that kills so many people in incidents like those there were in a Chicago nightclub about two weeks ago.

//
Huxley envisioned a dulling of the individual spirit, when in fact, what we will see is a flowering of diversity and a magnification of inherent traits.
//

Sorry, but I trust, or rather fear, Huxley. I tend to think that his title was no irony, but how it saw it at the writing (1932). It was the nazi deeds and their rout in the 1939-1945 war that drove him to alter the way it should be seen.

DSW

Posted by: Antoni Jaume on February 28, 2003 03:27 PM

AJ-

Neuroceuticals are tools. Like all tools they can be used for good and evil purposes.

Tools like the oxen plow, railroads, electricity, automobiles, planes, cell phones, the web, have all in one way or another created competitive advantage for those who adopted them. No one is forced to use electricity or cell phones, people have chosen to use them because of the value they provide.

In certain sectors at specific times, certain tools become competitive necessities because of the productity value they engender.

Neuroceuticals, although perhaps daunting and perhaps a bit scary because they have the capacity influence our moods and perceptions, are being developed rapidly. My purpose is to help begin the social discussion of their implications before they arrive.

About your comment: "Well, in the USA it may be so. And it would be another reason not to like them."---them?---please.

My thinking is that neuroceutical adoption for competitive advantage will likely begin outside the jurisdiction of western governments as the regulatory process will be slow to adapt. It is in the smaller countries or regions that initial adoption will occur where the political process can be pursuaded quickly.

Moreover, when people within large multinational companies begin to experience the advantages these new tools bring, the pressure to accept and legalize them will grow quickly. Governments and regions that don’t, won’t be able to compete. It would be as if a region didn’t allow telephone service.

Neuroceuticals will one day be considered very ordinary and disappear into people’s daily lives like all successful technologies do. Think of them as a testing process to enable humans to figure out what they would like to permanently engineer into them. That even causes me to pause.

Scared yet? Just like irrigation is an invention we don't think about much anymore, neurotecnology will in time seamlessly become part of our lives.

BTW-I am prognosticating, projecting, forecasting, suggesting....not anything more

Posted by: Zack Lynch on February 28, 2003 07:49 PM

I'd just point out in this context that oxytocin isn't just a neurological mood-altering drug, by the way ... it's a pretty serious instrument of the endocrine system. They give it to women to speed up the process of giving birth, and sufficiently high doses will cause men to start lactating. I really wouldn't advise taking part in any of these researchers' tests.

Posted by: dsquared on March 1, 2003 07:11 AM

>>oxytocin isn't just a neurological mood-altering drug, by the way ... it's a pretty serious instrument of the endocrine system... sufficiently high doses will cause men to start lactating<<

Why do you think it's called "the milk of human kindness"?

Posted by: Brad DeLong on March 1, 2003 12:21 PM

It also plays an important role

"in the reproductive life of mammals. The hormone facilitates nest building and pup retrieval in rats, acceptance of offspring in sheep, and the formation of adult pair-bonds in prairie voles. In humans, oxytocin stimulates milk ejection during lactation, uterine contraction during birth, and is released during sexual orgasm in both men and women."

http://www.oxytocin.org/oxytoc/index.html

Posted by: ben on March 1, 2003 03:10 PM

Isn't trying to study economics using neuroscience kind of like trying to study the weather using quantum mechanics?

It might be theoretically possible, but it probably won't add anything useful to what can be learned more easily by focusing on higher levels of explanation.

Posted by: RC on March 3, 2003 12:22 PM
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