Don’t believe this blog – economists lie!

An old economics “joke” goes along the lines of an interviewer asking a mathematician what two plus two equals. The mathematician replies “four”. The interviewer asks an economist the same question. The economist gets up, locks the door, sits down next to the interviewer and says “What do you want it to equal?”

Are economists, shall we say, a little playful with the truth? Economists Raul Lopez-Perez and Eli Spiegelman decided to find out. They devised an experiment to run with graduates from different subjects: Business & Economics, Humanities, Science, Law, Engineering and Psychology. Participants had to decide whether to lie about the colour of a circle that flashed up on their computer. There was a monetary incentive to lie, because reporting that the circle was green would earn the participant more money.

They found that gender and religious beliefs had no effect. But subject area did: law and humanities students chose the honest strategy over 50% of the time. But Business and Economics students only chose the honest strategy 22-23% of the time. Engineering students weren’t far behind in the ranks of the dishonest, choosing the honest strategy only 25% of the time.

So does studying Business and Economics make you less honest, or do people who feel less strongly about morals find themselves more attracted to those subjects? By using a technique called instrumental variables, and looking at the correlation between political beliefs and subject choice, the authors argue that studying Business and Economics teaches people to think like the theoretical “Homo Economicus”, the rational economic man who thinks about how best to maximise his utility (broadly, happiness) in world of scarcity – and who, depending on his preferences,  might be more likely to trade off some moral discomfort for more money.

For those now concerned about the accuracy of posts on this blog, consider that Homo Economicus would hardly spend his weekdays complaining about work and spend his weekend blogging for free.

The full paper is here.

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One Response to Don’t believe this blog – economists lie!

  1. Pingback: Krugman on the Failure of Economics in a Crisis « Trenz Pruca's Journal

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