Aesop Econ: The Grasshopper and the Ants

Here’s one I remember from childhood:

THE ANTS were spending a fine winter’s day drying grain collected in the summertime. A Grasshopper, perishing with famine, passed by and earnestly begged for a little food. The Ants inquired of him, “Why did you not treasure up food during the summer?” He replied, “I had not leisure enough. I passed the days in singing.” They then said in derision: “If you were foolish enough to sing all the summer, you must dance supperless to bed in the winter.”

Wow. There’s so much econ in this fable it’s hard to know where to start.

Obviously, we’re looking at a problem of intertemporal choice. The insects must decide how much effort to exert during an earlier period (summer) to prepare for a later period (winter). Exerting effort entails a present cost in terms of forgone leisure, but a future benefit in terms of consumption. The optimal choice depends on the magnitude of the subjective costs and benefits, as well as the chooser’s rate of time preference -- that is, how much he values the present relative to the future.

To a behavioral economist, the fable involves myopia or hyperbolic discounting. To simplify greatly, the grasshopper places too much weight on the present simply because it’s the present. If asked during the spring to choose his summer behavior, the grasshopper might plan to work harder. But then the lazy days of summer arrive, and suddenly he decides to kick back. This is known as time inconsistency, and it is often regarded as evidence of cognitive bias or irrationality.

To a neoclassical economist, however, this is clearly a fable about moral hazard -- the tendency to take greater risks when shielded against the consequences. No one knows whether the coming winter will be mild or harsh, and so they must choose between storing up food or taking a gamble. The grasshopper’s failure to work during summer might well be a rational response to the expected assistance of others in the event of a harsh winter.

And this raises the specter of the Samaritan’s Dilemma. People of a kind and decent disposition don’t wish to allow others to suffer, especially if helping them would be a small sacrifice. But providing charity may foment moral hazard, thereby leading to more people needing help.

The Samaritan’s Dilemma featured prominently in the most recent Republican presidential debate, in which Wolf Blitzer posed a tough question to Ron Paul:

A healthy 30-year-old young man has a good job, makes a good living, but decides: “You know what? I’m not going to spend $200 or $300 a month for health insurance because I’m healthy, I don’t need it.” But something terrible happens all of a sudden, he needs it. Who’s going to pay if he goes into a coma, for example? Who pays for that?

This 30-year-old man is the grasshopper, and we are the ants. Aesop’s ants take the position of Ron Paul: “Well, in a society that you [sic] accept welfarism and socialism, he expects the government to take care of him. … But what he should do is whatever he wants to do, and assume responsibility for himself.” I find it interesting that so many people -- who presumably heard this fable in their childhood and thought it wise – found Paul’s answer reprehensible.

Paul also advocated private charity as an alternative to government. Yet private charity, too, creates the potential for free-riding by the irresponsible. So there is a tension in Paul’s position. John Goodman explains how the tension can be resolved:

[P]rivate sector charitable activities are never run like government entitlements. If you are away from home and lose your wallet, the local Salvation Army will give you a meal and a place to sleep and maybe even some cash. But they will not do this day after day, night after night. It’s probably fair to say that all private charities seek to give aid without encouraging dependency.

Aesop’s ants follow a similar policy; they do not refuse the grasshopper aid outright, but instead inquire as to how the grasshopper’s situation arose. Of course, charitable discretion is not a perfect answer. There is always the risk of denying help to the deserving, and also the risk of giving help to the undeserving (what if the grasshopper had lied?). But if you grasp the Samaritan’s Dilemma, you realize there is no perfect answer; that’s why it’s called a dilemma.

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Sex For Me But Not For Thee?

Robin Hanson links to an interesting article about which activities young adults count as “having sex.” The article purports to reveal a double-standard: people are less likely to call a given act sex when they did it, and more likely to call it sex when their long-term partner did it. Here’s the abstract:

The purpose of this study was to determine if undergraduates (N=839) apply the same standard to themselves when labeling a behavior ‘‘having sex’’ as they apply to their significant others if those persons engage in the same behaviors outside the relationship. Using a between-participants design, one form asked participants if each of 11 behaviors constituted having sex if they engaged in the activity; the other form asked participants if each of the same behaviors constituted having sex if their significant other engaged in the activity outside their relationship. Participants answering for themselves were less likely to indicate a behavior was having sex for all behaviors except penile–anal and penile–vaginal intercourse. Men were also more likely than women to indicate most behaviors were having sex. The authors discuss what they define as a definitional discontinuity in undergraduate emerging adults’ definitions of having sex. Fundamental attribution error (FAE) and emerging adulthood literature are used to explain the findings. Health and relationship implications are identified. [emphasis added]

These are fascinating results, but I don’t think they really demonstrate what the authors say they do.

Let’s take an example: does oral sex count as sex? It turns out that men are less likely to say “yes” when they’re the ones who did it, and more likely to say “yes” when it’s their girlfriends who did it. And the same is true for women; they’re more likely to call it sex when their boyfriends did it than when they did it themselves.

The authors interpret this as evidence of a self-favoring bias known as the Fundamental Attribution Error. People wish to see themselves in a favorable light and so they cut themselves some slack, but they are less forgiving when it comes to other people.

But let’s look at how the survey questions were actually phrased. On Form A, respondents were asked to classify an activity involving themselves, such as:

A person had oral contact with your genitals.

On Form B, respondents were asked to classify an activity involving their S.O. (defined as an actual or hypothetical boyfriend/girlfriend or spouse), such as:

Another person had oral contact with your S.O.’s genitals.

Note that the phrasing of the latter activity instantly implies cheating. It mentions an S.O., which by definition means there exists a committed relationship. (The past tense phrasing leaves open the possibility of the event having occurred before the relationship, but the “S.O.” phrasing nevertheless brings the possibility of cheating to mind.) The phrasing of the former activity, on the other hand, does not imply cheating; no S.O. is ever mentioned.

So here’s an alternative hypothesis: the differential results may represent a framing effect rather than a self-serving bias. People tend to define “having sex” in a broader way when faithfulness is an issue, but in a narrower way when the issue is perceived as simply definitional. Thus, a person might consider oral sex to be not-quite-sex as a matter of definition, but count it as sex for purposes of policing loyalty. And that could be true even if the potential cheater is oneself.

This is not to say that there’s no FAE here, just that something else could easily be going on. To distinguish FAE from the framing effect, you’d want to phrase the activities in a more symmetrical fashion, something like this:

A person, not your current S.O., has oral contact with your genitals.

versus

Another person, not you, has oral contact with your S.O.’s genitals.

A difference in answers here would isolate the FAE, since in both cases cheating is clearly involved. On the other hand, if you wanted to isolate the framing effect, you could phrase the activities like this:

A person has oral contact with your genitals.

versus

A person who is not your current S.O. has oral contact with your genitals

This pairing focuses entirely on one person (the respondent) while differing on whether the possibility of cheating is invoked.

The larger point is that the existing question-pairs differ on two dimensions (the person involved and whether an S.O. is mentioned). But to isolate a particular kind of difference, they need to differ on just one dimension.

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