Wharton Professor Studies the Relationship Between Economics and GreedFrancesca Di Meglio
“Economics makes people worry if I’m too compassionate or caring, then people will think I’m a do-gooder or bleeding heart,” Grant says. “If everyone thinks this way and acts accordingly, then no one will ever show compassion.”
In addition to conducting research on the relationship between studying economics and behavior, Grant wrote the book Give & Take: A Revolutionary Approach to Success (Viking Adult, 2013), which was released in April. In the book, Grant focuses on how the behavior of businesspeople influences their success. Now, he says, he’d like to teach economics students that they don’t have to be driven by the bottom line alone. Recently, he spoke with Bloomberg Businessweek reporter Francesca Di Meglio. Here are edited excerpts of their conversation:
How did you come to the conclusion that those who study economics are greedier?
A number of studies built the case. My favorite study of the ones we conducted was one in which we recruited accomplished people, most of whom were between the ages of 40 and 50. They were [chief executives] and senior executives. Some of them were responsible for thousands of people. We had some of them listen to sentences with randomly assigned words related to economics and others listen to sentences with randomly assigned words that were neutral. After that exercise, we asked everyone to deliver bad news. Each had to reprimand one employee who was always showing up late to work because of traffic and car troubles. And [each] had to break the news to another that he had to transfer somewhere he didn’t want to live. Those executives who had unscrambled sentences related to economics just beforehand were less sympathetic and less likely to help their troubled employees.
What is the takeaway from this study?
At a very basic level, it’s a cautionary note about what we teach and what we expose students to. We think we’re teaching them the world and how it really works. Sometimes we’re actually creating the world. If we teach students that the world is narrow and everyone works in [his] own self-interest, they’ll believe us, and that is the way the world will be.
What actions can professors take instead?
Economics courses—especially ones such as macroeconomics and business economics—often focus on game theory. Students are exposed to the prisoner’s dilemma. You learn that for things to go well, everyone must cooperate with one another. But people get greedy, and if your friend defects and you don’t, then you get screwed. So everyone defects to protect himself and win.
In real life, people are not as likely to defect all the time because there are consequences to their decisions beyond victory. Want to keep teaching the prisoner’s dilemma? You must make students participate repeatedly in the exercise, so that they can’t be anonymous when they defect and their reputation follows them, just as it would in the real world. You can’t keep being a greedy jerk and get away with it.
Also, when we teach economic principles, we often say that it is about the allocation of scarce resources. But students need to understand it’s also about making resources less scarce in the first place.
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