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Uncommon Knowledge

The cruelty of markets: Die, mouse

And other surprising insights from the social sciences

Traders: Die, mouse

Are Wall Street traders born ruthless, or does the job make them that way? New research suggests that people become more callous when exposed to the pressures of the market. German economists presented people with the option of saving the life of “a young and healthy mouse, which in case it survived would in expectation live for about 2 years in an appropriate, enriched environment, jointly with a few other mice,” or getting money and letting the mouse die (“the killing process was also shown in a short video”). When people made this choice alone, less than 50 percent took the money (10 euros, about $13) and let the mouse die. When people could bargain with others to receive money for letting the mouse die, over 70 percent let the mouse die for less than or equal to 10 euros. (For the sacrifice to become this popular in decisions made alone, people needed about 50 euros, about $65.) Moreover, in a market with multiple negotiators, the price for the mouse’s life dropped over time, whereas the price for a store coupon didn’t.

Falk, A. & Szech, N., “Morals and Markets,” Science (May 10, 2013).

Welfare, engine of prosperity

An important question in economics is why the Industrial Revolution happened when and where it did. Several theories have been offered, but here’s a new one from a pair of economists: The boom in commerce came thanks in part to the welfare state. While China or countries in continental Europe may have had access to technology and commercial institutions, Britain was the first to implement a generous and reliable safety net, specifically the Old Poor Law of 1601, when the state formally mandated “relief of the poor.” Where there was more relief, there was less social unrest and more technological innovation, because people were more cushioned from the downside of economic progress and more willing to take risks.

Greif, A. & Iyigun, M., “Social Organizations, Violence, and Modern Growth,” American Economic Review (May 2013).

For best results, zap brain

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Would you be willing to wear an electrode cap to turbocharge your thinking? In 20 years, perhaps we’ll all be doing just that. In new research, students at the University of Oxford performed arithmetic calculation and memorization while hooked up to a pair of electrodes placed on each side of the head and producing random electrical noise. Compared to those not receiving electrical stimulation, those who were stimulated improved their arithmetic performance, not just during the experience of being stimulated but also six months later when tested on both old and new calculation problems. Physiological data suggest that the stimulation induced “more efficient neurovascular coupling in brain regions associated with mental arithmetic”—i.e., it made brain cells work better.

Snowball, A. et al., “Long-Term Enhancement of Brain Function and Cognition Using Cognitive Training and Brain Stimulation,” Current Biology (forthcoming).

How race shapes school reform

People across the political spectrum agree that excellent education for all students is critical to our nation’s future and our ideals of equal opportunity. According to a new study, though, how much they actually push the system to improve may break down according to the race of the students. The number of teacher quality reforms enacted in a state was responsive to white graduation rates but not black graduation rates, even controlling for state government liberalism, student population, and union power. In addition, whites’ opinions of their local schools were associated with white student performance but not black student performance, regardless of how many blacks were in the school system.

Hartney, M. & Flavin, P., “The Political Foundations of the Black–White Education Achievement Gap,” American Politics Research (forthcoming).

When women earn more

Though women have become breadwinners in the modern economy, a new analysis of marriage data suggests that men and women are still trying to enforce the traditional norm that men should be the ones to bring home the bacon. Marriage rates declined where the typical woman was more likely to out-earn the typical man, and increasing earnings for women explains a significant share of the decline in marriage in recent decades. Moreover, within marriages, wives appear to dial back their earnings so as not to out-earn their husbands; if they do out-earn their husbands, that portends problems with the marriage. Also, wives who out-earn their husbands appear to spend more, not less, time on housework, perhaps so as not to threaten their husband’s sense of manhood.

Bertrand, M. et al., “Gender Identity and Relative Income
within Households,” National Bureau of Economic Research (May 2013).

Kevin Lewis is an Ideas columnist.
He can be reached at
kevin.lewis.ideas@gmail.com
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