can repeat the question, but am I bright enough to ask it?"
To understand the nature of foreign markets, we must understand the psychology of foreign cultures. This entails a search for human universals and how these constrain cultural variation. To illustrate, consider the problem of cooperation, and in particular, how people judge fairness and respond to unfair play.
Dear President Bush,
I am delighted to hear that you are willing to consider my application as a science advisor to your administration. In the current climate, I can't think of a more important mission than to clarify how the different branches of science can contribute to the overall health of our nation. I would put it stronger: the health of our nation depends on science. In this spirit, I would like to sketch a proposal for how recent developments in the sciences of the mind directly impact on government policies concerning economics, law, and health care.
1. Human nature, universality, and the economics of fairness
Our economy is currently in a vulnerable state of affairs. The stock market oscillates unpredictably. Some portion of this oscillation is driven by foreign markets. To understand the nature of foreign markets, we must understand the psychology of foreign cultures. This entails a search for human universals and how these constrain cultural variation. To illustrate, consider the problem of cooperation, and in particular, how people judge fairness and respond to unfair play.
A standard test of resource distribution and maximization in experimental economics is the Ultimatum Game. The standard game entails one player making an offer to share some proportion of a pot of money to another player. The game is played only once and the identity of the other player is never revealed. Once the player making an offer does so, the other player has a choice: accept the offer or reject it. If the receiver accepts, then he or she keeps the proportion offered and the player making the offer keeps the remainder. If the offer is rejected, both players end the game with no money at all. The intuition from economics, an intuition driven by the view that people are generally selfish and wish to maximize personal resources, is that the player offering should propose the smallest amount acceptable to another player.
This makes good sense because from the receiver's perspective, some money is better than no money, so all offers should be accepted. When this game is played in developed nations such as the united States and the UK, results indicate that the economist's intuition is wrong. People typically make offers of about 50% of the pot and receivers reject offers of 20% or less. Both moves are highly irrational if resource maximization is the norm. It is clearly not the norm. In the developed world, fairness drives both the offer and the acceptance, and what appears to be fair is about a 50:50 split.
This was the standard textbook account until about 5 years ago. The tide changed when a small group of economists decided to look into cross cultural variation of resource maximization and distribution. When people in small scale, non-industrial societies, play the ultimatum game, there are two clear results. First, every human, independent of cultural heritage, has a powerful sense of fairness. Second, the local culture shifts what people consider fair and how they respond to an unfair trade. For example, when the ultimatum game is played in some cultures, there are modal offers of only 15% while in other cultures the offers are as high as 50% but the rejection rates are almost equally high. These results show that the human mind has evolved a powerful sense of fairness, a capacity that is part of the brain's unique endowment. What culture does, constrained by biology, is change what constitutes a fair exchange. Other studies in experimental economics have begun to reveal how public goods can be protected against cheaters. Once again, pure economics fails where an integration of economics, biology, and psychology pays off handsomely. Public goods are vulnerable to cheaters because the payoffs are higher if others contribute in your stead. To guard against defection, economists working in an evolutionary psychology framework have shown that two factors maintain public goods: information on reputation (what participants contribute) and the capacity to punish those who cheat. Again, these factors are cross-culturally important and stable, revealing universal properties of the mind that persist in the face of changes in the environment, including the emergence of civilization, formal governments, universities and so forth.
This view of cooperation and fairness shows striking parallels with other systems of knowing, including language and mathematics. Although each of these systems show cross-cultural variation, each is constrained by machinery in the brain that is present in all humans, independent of culture. The implications of this perspective, and these particular findings in anthropological economics, are profound. Given our nation's interest in and commitment to international trade, we would be well advised to take seriously both the facts concerning human universals in decision making as well as the power of cross-cultural differences to tweak the perception of fairness. We are more likely to develop productive programs for economic development by understanding those parts that unify all humans and those parts that make us different. Our government must not only incorporate such findings, but seriously consider the integration of scientists working in these areas with government officials attempting to launch international aid programs.
2. The brains underlying control and its loss
Each year, our government spends millions, if not billions of dollars on problems concerning violence, drug abuse, gambling, smoking, and eating disorders. Although these problems appear different on the surface, they reflect a common underlying theme: overcoming temptation in the face of weak systems of control. Over the last decade, studies in cognitive neuroscience and genetics have begun to pinpoint areas in the brain that are involved in reward, conflict monitoring, and control, as well as gene sequences that may put some people at greater risk than others with respect to overcoming problems of control. To illustrate the importance of these findings for the health of our nation, consider the following frightening fact: the best predictor, internationally, of the level of violence within a nation is the proportion of young men in the population. Men are more violent than women in all cultures. Although cultures can shift the level of violence, the sex difference remains. Men are more heavily involved in risk taking. We now know that a significant correlate of violence in humans, both men and women, is the level of circulating serotonina key neurochemical in the brain. When serotonin levels are low, the level of control is lower; low serotonin levels are associated with greater impulsivity, more risk taking. We are only beginning to understand what determines and changes levels of serotonin in the brain. One thing is certain: the key lies in understanding what happens in development. A recent study illustrates this point, and shows why science must interface with policy. Genetic analyses have revealed that a particular form of one gene causes differential expression of an enzyme. This enzyme plays a critical role in the production of serotonin. In a study of several hundred young boys, results revealed that when this gene produces a low level of the target enzyme, such children are far more vulnerable to physical abuse by parents than in children with a high level of the enzyme. In particular, boys who were targets of severe parental aggression were much more likely to shows signs of antisocial personality disorder if the level of the enzyme was low than if it was high. Parental aggression should not be tolerated under any circumstance. But what this study reveals is that we are not equally vulnerable to aggression. As our understanding of genetics and neuroscience increase, we will be able to use this information to better plan programs for intervention. Ultimately, this interplay between molecular genetics and neurobiology on the one hand, and social work on the other hand, should lead to a reduction in overall levels of violence as we can perhaps begin to target the source in development as opposed to the consequences in adulthood.
In closing, I believe that our government is ideally poised to bring science more fully into issues of policy. The rapid explosion of knowledge in the sciences must not sit idly in the libraries of universities, but should make its way into building a healthier nation. As President, you have the opportunity to lead this initiative.