Wednesday, October 03, 2007

Genes Influence People's Economic Behavior

Genes exert influence on people's behavior in a very common experimental economic game:

The paper, published in the Oct. 1 advanced online issue of the Proceedings of the National Academy of Sciences, looked at the ultimatum game, in which a proposer makes an offer to a responder on how to divide a sum of money. This offer is an ultimatum; if the responder rejects it, both parties receive nothing.

To study genetic influence in the game, Cesarini and colleagues took the unusual step of recruiting twins from the Swedish Twin Registry, and had them play the game under controlled circumstances. Because identical twins share the same genes but fraternal twins do not, the researchers were able to detect genetic influences by comparing the similarity with which identical and fraternal twins played the game.

The researchers' findings suggest that genetic influences account for as much as 40 percent of the variation in how people respond to unfair offers. In other words, identical twins were more likely to play with the same strategy than fraternal twins.

Fascinating! I can't say I'm overly surprised by this, but it is a very understudied aspect of economics. It certainly deviates from a purely rational actor that many models are based upon.

I wonder how much of this is just picking up a genetically influenced personality trait and how much personality affects economic behavior? I can think of several ideas for papers looking into this.

Read Wikipedia's entry on the ultimatum game.

No comments: