Infans economicus: Is There Something Disturbing About How Babies Respond to Incentives?

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Photo: Sarah Joy

“The disturbing thing scientists learned when they bribed babies with graham crackers” was the Washington Post’s engaging headline on their Wonkblog a few weeks ago. Ready to be disturbed with the best of them, I read on.

In an experiment by Yale psychologists Arber Tasimi and Karen Wynn, children preferred to accept a small reward in (graham crackers) from a fictitious person “Max” who is “always nice” than a reward twice as great from “Craig,” an “always bad” character. But when Craig offered more than twice what Max was offering, some of the subjects set aside their scruples and took the graham crackers from Craig.

The headline writer, I imagine, was disturbed by the image of Homo economicus in the crib.

Infans economicus, an infant edition of the economists’ calculative and self interested Economic Man, is apparently more unsettling that the adult version. It was big news. I had already heard about it on “All Things Considered.”

“When it comes to public policy and jurisprudence it is big mistake to let Homo economicus be the behavioral model of the citizen.”

But reading the experiment, I was inspired by the kids. For me the news was that when bad Craig offered twice as much as good Max, only one in five went for the larger reward. And even more impressive, when Craig offered a reward eight times larger than Max still less than half of the kids chose to “do business” with him. An experiment with infants produced similar results.

The authors of the study rightly celebrated this evidence of “a willingness to forgo self interests” as “a fundamental aspect of human nature.”

It cannot be this piece of good news that disturbed the headline writer. It must have been that the adage “every man has his price”—bad enough for adults—is especially objectionable when it comes to infants.

Here’s where I fear I may lose you. I’m not sure that having a price is always shameful. Suppose I call my friend in a nearby town and offer to help him move into his new apartment this coming weekend. But when Saturday comes around, bus drivers are on strike so instead of it costing me $12 in bus tickets it now is going to cost a total of $60 in taxi fare. I call to explain that I won’t be showing up. I trust that my friend will express disappointment, not reprobation.

Some of our most elevated motivations—to help others even at a personal cost—seem to obey what economists call the law of demand: the not entirely surprising meaning of which is that when the price of some activity goes up, you do less of it. This works for buying ice cream cones: you buy fewer if the price is higher. In the story just told the law of demand was also at work: when the price of getting to your place rose, I dropped out.

But does it really work for altruism?

Economists Jim Andreoni and John Miller designed an experiment to find out. Experimental subjects were awarded an endowment of money by the experimenter and given the opportunity to transfer some, all or none of it to another (anonymous) person. They varied the ‘price of altruism’ so that transferring $10 to the other person cost the subject $30 (price of altruism = 3, because every dollar the other person got cost the subject 3 dollars) or $10 (price of altruism = 1) and so on.

What did they find out? When the price was 1, subjects gave away on average a quarter of their endowment. When the price rose to 2, generosity by this measure was cut almost in half. Just like ice cream cones.

I suspect that Wonkblog had idea that “rational altruism” is an oxymoron and that none of the concepts of decision theory that we use to understand the demand for ice cream—like the law of demand—have any business being applied to morality.

I’m not bothered by the idea that the kids in the Tasimi-Wynn experiment considered the relevant tradeoffs when the graham cracker price of shunning the bad guy rose. The economist in the crib is ok with me.

It’s not that I’m incapable being disturbed by how infants respond to incentives. Tell me that this recent experiment does not unsettle you at least a bit. Kids less than two years old avidly helped an adult retrieve an out-of-reach object in the absence of rewards. But after they were rewarded with a toy for helping the adult, the helping rate fell off by 40 percent.

The idea that economic incentives may compromise moral and other non-economic motives to do the right thing has a long history in psychology. It has recently been picked up by economists, which I’m sure you’ve figured out by now is what I am.

In The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens, I make the case that when it comes to public policy and jurisprudence it is big mistake to let Homo economicus be the behavioral model of the citizen. There are three reasons.

First, in light of recent behavioral experiments, many of them by economists, as an empirical matter Homo economicus does not stand up well as description of human behavior. You’ll find more on “the death of Homo economicus” here.

“No matter how cleverly designed to harness self interest, incentives cannot alone provide the foundations of good governance.”

Second, remember what happened when the infants who helped the adult were rewarded. The assumption of self interest may be a self fulfilling prophecy. Incentives sometimes induce people to act in more self interested ways. You’ll find more on “moral motives and incentives” here.

Third, fines, rewards, and other material inducements sometimes work exactly as they do on the whiteboard in Ec 101. But they are no substitute for genuine concern for the well-being of others, ethical commitments, and intrinsic motivations. No matter how cleverly designed to harness self interest, incentives cannot alone provide the foundations of good governance of a society faced with challenges such as climate change, increasing inequality, and how to make the information based economy work for everyone.

Psychologists Felix Warneken and Michael Tomasello, who did the experiment about kids cutting back on helping after being rewarded concluded: “Children have an initial inclination to help, but extrinsic rewards may diminish it. Socialization practices can thus build on these tendencies, working in concert rather than in conflict with children’s natural predisposition to act altruistically.”

The challenge for policy makers, human resource managers, and others involved in the design of incentives: how can fines, bonuses and the like, as Warneken and Tomasello put it be made to work “in concert rather than in conflict with” what Lincoln called “the better angels of our nature.”

Sam_bowlesSamuel  Bowles (PhD Economics, Harvard) directs the Behavioral Sciences Program at the Santa Fe Institute,  recently published The Moral Economy: Why good incentives are no substitute for good citizens (Yale University Press) and is  one of the authors of The Economy, a free online introduction to economics by the Curriculum Open Access Resources for Economics (CORE) Project. He also blogs at Psychology Today and  is the author of Microeconomics: Behavior, Institutions and Evolution, and with Herbert Gintis wrote A cooperative species: Human reciprocity and its evolution.

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