Wednesday, October 08, 2008

Instinctual basis of fury at Wall Street

Benedict Carey has a great article in last Tuesday's NYTimes science section on the evolved psychology of retaliation and forgiveness we share with a large number of other social animal species, particularly with reference to the current public anger at the financial community:
The fury is based in instincts that have had a protective and often stabilizing effect on communities throughout human history. Small, integrated groups in particular often contain members who will stand up and — often at significant risk to themselves — punish cheaters, liars and freeloaders...The catch in this highly sensitive system, most researchers agree, is that it most likely evolved to inoculate small groups against invasive rogues, and not to set right the excesses of a vast and wildly diverse community like the American economy. Some experts believe that Japan’s disastrous delay in bailing out its banks in the early 1990s was caused in part by a collective urge to punish corrupt bankers, and they fear a similar outcome today.
Carey describes a variety of investment game experiments that probe, for example, how our retribution behaviors depend on whether we are being observed by others.

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