When Do We Feel Sorry for Others? : An Externality of Lake Use as an Example

Abstract

The purpose of the study was to verify, through the use of an experimental method, the assumption that the ‘economic human' pays more attention to the externality he/she causes as the strength of externality increases. We used a social-experiment design within an undergraduate classroom to test assumptions, using statistical method. A lakeside plant was used as an example. Our results confirmed the following: (1) 66% of subjects behaved altruistically, while the remainder (34%) behaved selfishly, suggesting that the assumption of mainstream economics may not be appropriate; (2) when we compared situations in which the plots with the natural resource (e.g. the plant) to which the economic human had property rights were large or small in number, those who possessed larger plots tended to be more conservative in resource use; and (3) when we compared situations where the economic human's extent of influence on natural resources was large or small, those with greater influence tended to be more conservative in resource use. Although mainstream economics assumes a rational economic human—who is supposedly selfish—our results suggest that altruistic behaviour dominates selfish behaviour, and that altruistic behavior should be taken into greater consideration when making policy.