Economists Suggest Mind-Reading As a Way to Determine Public GoodS

A bizarre experiment carried out at CalTech has led economists to an even more bizarre assertion. Governments allocating spending for public goods like education should use "neurotechnology" - mind-reading via fMRI brain scans - to determine who should be taxed.

The problem that CalTech economist Antonio Rangel and his team were grappling with was the "free-rider" problem. This occurs because people want public goods, but don't want to pay for them. So they lie about how much they value a given good such as health care or public parks. So, for example, a swimmer might benefit a great deal from a public pool. But she wants to pay as little as possible for it, so she lies about how much it will benefit her. This may not affect the public's decision to build the pool, but it could affect how much she pays for it.

Economists have long believed this is an unsolvable problem. But Rangel says fMRIs can actually force people to tell the truth about what their values are when it comes to public goods.

A release from CalTech explains the researchers' methods:

As part of this experiment, volunteers were divided up into groups. "The entire group had to decide whether or not to spend their money purchasing a good from us," [economics professor Antonio] Rangel explains. "The good would cost a fixed amount of money to the group, but everybody would have a different benefit from it."

The subjects were asked to reveal how much they valued the good. The twist? Their brains were being imaged via fMRI as they made their decision. If there was a match between their decision and the value detected by the fMRI, they paid a lower tax than if there was a mismatch. It was, therefore, in all subjects' best interest to reveal how they truly valued a good; by doing so, they would on average pay a lower tax than if they lied.

"The rules of the experiment are such that if you tell the truth," notes Krajbich, who is the first author on the Science paper, "your expected tax will never exceed your benefit from the good."

In fact, the more cooperative subjects are when undergoing this entirely voluntary scanning procedure, "the more accurate the signal is," Krajbich says. "And that means the less likely they are to pay an inappropriate tax."

This changes the whole free-rider scenario, notes Rangel. "Now, given what we can do with the fMRI," he says, "everybody's best strategy in assigning value to a public good is to tell the truth, regardless of what you think everyone else in the group is doing."

And tell the truth they did-98 percent of the time, once the rules of the game had been established and participants realized what would happen if they lied. In this experiment, there is no free ride, and thus no free-rider problem.

"If I know something about your values, I can give you an incentive to be truthful by penalizing you when I think you are lying," says Rangel.

While the readings do give the researchers insight into the value subjects might assign to a particular public good, thus allowing them to know when those subjects are being dishonest about the amount they'd be willing to pay toward that good, Krajbich emphasizes that this is not actually a lie-detector test.

"It's not about detecting lies," he says. "It's about detecting values-and then comparing them to what the subjects say their values are."

"It's a socially desirable arrangement," adds Rangel. "No one is hurt by it, and we give people an incentive to cooperate with it and reveal the truth."

"There is mind reading going on here that can be put to good use," he says. "In the end, you get a good produced that has a high value for you."

From a scientific point of view, says Rangel, these experiments break new ground. "This is a powerful proof of concept of this technology; it shows that this is feasible and that it could have significant social gains."

And this is only the beginning. "The application of neural technologies to these sorts of problems can generate a quantum leap improvement in the solutions we can bring to them," he says.

Indeed, Rangel says, it is possible to imagine a future in which, instead of a vote on a proposition to fund a new highway, this technology is used to scan a random sample of the people who would benefit from the highway to see whether it's really worth the investment. "It would be an interesting alternative way to decide where to spend the government's money," he notes.

Wait, what? The government is going to do brain scans on the public to determine what we "really" value and then tax us accordingly? Or possibly even choose which public works projects to undertake? The only place this can lead is some kind of terrifying, dystopian welfare state where the government spends more money on fMRI machines than anything else.

via CalTech