2023-12-09 11:39:43
Revenge of the Freeloaders economics/theory

Science Journal – WSJ.com

We all bristle at people who put themselves ahead of the common good, whether it is by evading taxes, shirking military service, cheating on bus fares or littering. Many of us will go out of our way to shame, shun or otherwise punish them, researchers have shown. That’s how we foster a community that benefits everyone, even at some cost to ourselves.

Economists analyzing ingredients of the social glue that holds us all together wonder whether that public spirit of rebuke and reward is an innate human value or a byproduct of the particular society in which we live. Until recently, however, they rarely have reached across cultural boundaries to compare how people in disparate communities actually weigh private gain against public good.

In the most sweeping global study yet of cooperation, a team of experimental economists tested university students in 15 countries to see how people contribute to joint ventures and what happens to them when they don’t. The European research team discovered startling differences in how groups around the world react when punishment is handed out for antisocial behavior.
WSJ’s Robert Lee Hotz speaks to Kelsey Hubbard about an important study that looked at how people responded to peer pressure in cooperative ventures across many societies.

In some countries, researchers found, almost no good turn went unpunished. “What kept popping up is this element of retaliation,” said economist Benedikt Herrmann at the U.K.’s University of Nottingham, who reported the experiment this past March in Science. “It took us by surprise.”

Among students in the U.S., Switzerland, China and the U.K., those identified as freeloaders most often took their punishment as a spur to contribute more generously. But in Oman, Saudi Arabia, Turkey, Greece and Russia, the freeloaders more often struck back, retaliating against those who punished them, even against those who had given most to everyone’s benefit. It was akin to rapping the knuckles of the helping hand.

To explore cooperation across cultures, Dr. Herrmann and his colleagues recruited 1,120 college students in 16 cities around the globe for a public-good game. The exercise is one of several devised by economists in recent years to distill the complex variables of human behavior into transactions simple enough to be studied under controlled laboratory conditions.

The volunteers played in anonymous groups of four. Each player started with 20 tokens that could be redeemed for cash after 10 rounds. Players could contribute tokens to a common account or keep them all to themselves.

After each round, the pooled funds paid a dividend shared equally by all, even those who didn’t contribute. Previous research shows that a single selfish individual riding on the generosity of others can so irritate other players that contributions soon drop to nothing.

That changes when players can identify and punish those who don’t contribute (in this case, by deducting points that can quickly add up to serious money). Once such peer pressure comes into play, everyone — including the shamed freeloader — starts to chip in.

“Freeloaders are disliked everywhere,” said study co-author Simon Gachter, who studies economic decision-making at Nottingham. “Cooperation always breaks down if people can’t punish.”

The students behaved the same way in all 16 cities until given the chance to punish those taking a free ride on the shared investment. Punishment was done anonymously, and it cost one token to discipline another player.

Among those punished, differences emerged immediately. Students in Seoul, Istanbul, Minsk in Belarus, Samara in Russia, Riyadh in Saudi Arabia, Athens, and Muscat in Oman were most likely to take revenge by deducting points from other players — and to give up a token themselves to do it.

“They didn’t believe they did anything wrong,” said economist Herbert Gintis at New Mexico’s Santa Fe Institute. And because the spiteful freeloaders had no way of knowing who had punished them, they often took out their ire on those who helped others most, suspecting they must be to blame.

Such a readiness to retaliate, researchers said, reflected relatively lower levels of trust, civic cooperation and the rule of law as measured by social scientists in the World Values Survey, which periodically assesses basic values and beliefs in more than 80 societies. In countries with democratic market economies, peer pressure goaded people to cooperate. Among authoritarian societies or those dominated more by ties of kinship, freeloaders instead lashed out at those who censured them, the researchers found.

“The question is why?” said Harvard political economist Richard Zeckhauser.

No one is sure. The freeloaders might be angry at being trumped by strangers, or be unwilling to share with people they don’t know. They also might believe they are being treated unfairly.

But social appearances and the good opinion of others do regulate our behavior. In the only other major cross-cultural study of this sort, Dr. Gintis and his colleagues several years ago examined 15 primitive societies of farmers, foragers, hunters and nomads in 12 countries, not unlike those in which humanity might have first evolved. The researchers found that these people all cared as much about fairness as the economic outcome of a trade. “They care about the ethical value of what they do,” said Dr. Gintis.

Independent brain-imaging teams in Japan and the U.S. have shown just how valuable approval can be, as they reported in April in Neuron. Researchers at Japan’s National Institute for Psychological Sciences found that when they watched the brain respond to reputation and social status, the excited synapses looked awfully familiar: They were the same ones activated by money.

Studying peer pressure in 15 countries, economist Benedikt Herrmann at the UK’s University of Nottingham reported on “Antisocial Punishment Across Societies”3 in Science.
The researchers also ranked the national responses against the World Values Survey4, which periodically assesses values and cultural changes in societies all over the world.
Searching for the
origins of economic behavior, an international research team studied 15
primitive cultures in 12 countries and reported their findings in
We may be hard-wired to care about social standing, scientists at the US National Institute of Mental Health reported in “Know Your Place: Neural Processing of Social Hierarchy in Humans.”6
At Japan’s National Institute for Psychological Sciences, researchers reported in “Processing of Social and Monetary Rewards in the Human Striatum”7 that reputation activates the same brain areas as money.
Free-market philosopher Adam Smith, author in 1776 of An Inquiry into the Nature and Causes of the Wealth of Nations8 wrote first in 1759 on praise, blame, ethics and human nature in The Theory of Moral Sentiments9.

Michael Cushman — June 3, 2008 @ 2:27 am


I didn’t expect the difference by culture, but it can make sense within the context of social groups.

The key is “who is we?”

In societies with tribes and families being the dominate “we” then not giving to strangers makes sense, and feeling attacked by “them” also fits.

In open societies, “we” is everyone else in the nation. So as long as the subjects in the experiment felt the others were in their “we” then they were influenced into giving when punished.

Basically, outsiders can’t punish insiders. When the USA tries to punish Iran with sanctions, Iran becomes more patriotic, feels persecuted unfairly, and seeks to retaliate. Iranians don’t see the USA as in their “We”. The USA mistakenly thinks every country in the world is within their circle of influence, within the USA’s “we”.

The more the USA punishes, the more the Iranians resist. The more they resist, the more the USA feels the need to punish…. Same dynamic with Israel and Palestinians.

Someone needs to shift their “we” to break the cycle.

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