1. Human Nature and Economics

2. Articles ● The Riddle of the Human Species  By E.O. Wilson ● Energy and Climate on the White House Agenda ● Rethinking Mill and Paternalism  Mill, who believed that each individual is in a unique position to know what’s in her best interest, concluded that government may coerce citizens to refrain only from acts that are hazardous to others, and has no warrant for regulating an individual’s behavior. Whether this view is correct is, Sunstein claims, “an empirical question,” and recent research in cognitive psychology has seemed to show that in fact, we aren’t so good at choosing what’s best for us.

3. Good and Bad ● Write a list of 5 behaviors characteristic of a good person ● Write list of 5 behaviors characteristic of a bad person

4. Why Study Human Nature? ● To what extent are desirable ends constrained by human nature?  Insatiability  Biophilia (ecophilia)  Fairness and concern for others  Attitudes towards the future ● To what extent are allocative mechanisms constrained by human nature?  Are we inherently competitive, cooperative, or both?  Are we rational, emotional, or both? ● Are people the same everywhere?

5. Will Competition or Cooperation Solve Society’s Current Crises?

6. What is the conventional economic model of human nature? ● Homo-economicus  Self-interested  Insatiable  Rational  Competitive ● Is this closer to your depiction of a good person or a bad person?

8. Are People Rational?

9. Split into two groups. Group 2 leave room

10. Group 1 ● Serious flu will kill 6000 people  Choice A: Conventional vaccine will save 2000 people  Choice B: Experimental vaccine has 1/3 chance of saving everyone, 2/3 chance of saving no one ● Mark your choice and leave room

11. Group 2 ● Serious flu will kill 6000 people  Choice A: Conventional vaccine will result in death of 4000 people  Choice B: Experimental vaccine has 1/3 chance of saving everyone, 2/3 chance of saving no one ● Mark your choice

12. Are People Rational or Emotional? ● Context: social security #, health care ● Losses vs. gains  WTP vs. WTA ● Is perfect rationality possible in a complex world?

13. Are we Purely Self-interested? ● Game theory and experimental economics  Ultimatum game  Dictatorship game  Public goods game

14. Or do we care about others? H. comunicus, concern for fairness and community preferences H. naturalis, concern for sustainability and whole system preferences

15. Evidence From Evolution Cooperation and energy abundance Dictyostelium discoideum (amoeba) Myxococcus xanthus ( self-organized, predatory, saprotrophic, single-species biofilm called a swarm) saprotrophic, single-species biofilm called a swarm In humans, genetic and cultural evolution interact

16. Are People the Same Everywhere? ● Ultimatum game across cultures

17. ● Homo economicus, H. reciprocans, H. Comunicus Behavioral economics ● Neuroeconomics Prosocial behavior Easterlin Paradox Choice under conflict Extrinsic and intrinsic ● incentives Dictator game Ultimatum game

18. Prisoner’s dilemma Public-good and commonpool Altruistic punishment Conditional cooperation

19. Why Does this Matter? ● Desirable ends  Humans are satiable  We have a broad range of needs  Desired ends are in relationship to what others have ● Allocative mechanisms  Non-rival resources are best provided through cooperation, and we are highly adapted to cooperate  Rival resources may be effectively allocated through competition  Modeling humans as solely cooperative or solely competitive is entirely inappropriate