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Economist: ‘Science may not be the panacea we take it to be’
ITHACA, N.Y. — From ancient philosophers to modern-day scientists, the pursuit of knowledge has been seen as inherently good. But what if that assumption is wrong? A new study presents a counterintuitive idea that’s shaking up how we think about progress.
Economists Kaushik Basu of Cornell University and Jörgen Weibull of the Stockholm School of Economics have uncovered what they call a “knowledge curse” – situations where increased understanding of a problem can paradoxically reduce overall welfare. Their findings challenge our intuitions about the inherent value of information and raise thought-provoking questions about the downsides of scientific progress.
“Greater knowledge is always an advantage for a rational individual,” the researchers note in their paper, published in Royal Society Open Science. “However, this article shows that for a group of rational individuals greater knowledge can backfire, leading to a worse outcome for all.”
How is this possible? The key insight is that in certain types of interactions between people, having more information can change behavior in ways that end up hurting everyone involved.
The Mask Dilemma
To understand this counterintuitive concept, consider a simplified example: Imagine a society where everyone wears masks during flu season because they know it generally reduces transmission, even if it’s a bit uncomfortable. Overall, this leads to fewer illnesses and better public health.
Now imagine scientists discover a way to precisely measure the contagiousness of different flu strains each day. Armed with this new knowledge, people only wear masks on the most contagious days. While this seems rational for each individual, the result is that mask-wearing declines overall and more people get sick in the end.
This scenario illustrates how enhanced knowledge about an existing reality – such as the cost-benefit of wearing a face mask to help prevent the spread of disease – may hinder cooperation among purely self-interested individuals. When everyone acts on their own self-interest with more perfect information, it can sometimes lead to worse collective outcomes.
The Prisoner’s Dilemma of Progress
The researchers also demonstrate this effect using game theory – mathematical models of strategic interactions between rational decision-makers. They show how in certain types of “games” or scenarios, players with more knowledge about the situation will make choices that leave everyone worse off compared to when they had less information.
Basu and Weibull build their case using a theoretical two-player “Base Game” where each player has two actions to choose from, with expected payoffs for each combination. They then show how introducing new options or deeper understanding of the payoffs can lead to situations similar to the famous Prisoner’s Dilemma, where individual rationality leads to collectively suboptimal outcomes.
“What is summed up in the above parable is that in some interactions, perverse outcomes can be the result of science and rationality,” Basu and Weibull write.
A Race to the Bottom?
The implications of this work extend far beyond simple games. The researchers explore how evolutionary processes might play out if only some people initially gain access to new information. They find that knowledgeable individuals tend to outcompete the ignorant over time, potentially leading to a “race to the bottom” where everyone ends up worse off as the information spreads.
This raises challenging questions: Should potentially harmful information sometimes be restricted? Do we need stronger collective decision-making processes to override individual incentives in some cases? How can we reap the benefits of increased knowledge while mitigating its occasional downsides?
“Science can yield huge benefits, but we need safeguards,” Basu says in a statement. “What those are, we do not know. But the paper urges us to pay attention to this.”
The Power of Preemption
While the study paints a potentially grim picture, the authors also offer hope. They point to examples of successful preemptive actions throughout history, such as the drafting of constitutions that anticipate and address future problems. “Such preemptive laws have conferred large benefits to humankind,” they write.
The researchers suggest that cultivating stronger social norms and moral motivations could help align individual and collective interests, potentially dissolving the knowledge curse. By encouraging people to consider the greater good, not just their own immediate interests, we might be able to harness the power of knowledge without falling victim to its pitfalls.
As we continue to push the boundaries of human understanding, this work serves as a timely reminder that information isn’t always benign. Managing the power of knowledge responsibly may be one of the great challenges of our information age – a challenge we must meet to ensure that our quest for knowledge truly does lead to a better world for all.
“We assume that a scientific breakthrough that gives us a deeper understanding of the world can only help,” concludes Basu. “Our paper shows that in the real world, where many people live and strive individually or in small groups to do well for themselves, this intuition may not hold. Science may not be the panacea we take it to be.”
Paper Summary
Methodology
The researchers used game theory to model interactions between individuals under different information conditions. They analyzed a theoretical “Base Game” with two players, each having two possible actions. They then explored how introducing new options or deeper understanding of payoffs could change outcomes. Using mathematical analysis, they identified conditions where increased knowledge leads to lower overall welfare, defined as the average payoff across all players.
Results
The study found that in certain types of games, having perfect information about the current state leads to lower expected payoffs for all players compared to when they act based only on probabilities. This “knowledge curse” occurs when individually rational choices under full information produce worse collective outcomes than choices made under uncertainty. The effect persists even when evolutionary processes select for more knowledgeable individuals over time.
Limitations
The study relies on simplified game-theoretic models that may not fully capture the complexity of real-world interactions. The researchers acknowledge that their findings may not apply in all scenarios and that there are many cases where increased knowledge is clearly beneficial. The work is theoretical in nature and would benefit from empirical testing in experimental or real-world settings.
Discussion and Takeaways
The paper challenges conventional wisdom about the inherent value of information and highlights potential downsides of scientific progress that are often overlooked. It suggests a need for careful consideration of how new knowledge might change incentives and behaviors in ways that could be collectively harmful. The authors discuss potential policy implications, such as preemptive actions and agreements, while acknowledging the difficulty of anticipating future challenges. They emphasize the importance of cultivating social norms and moral motivations that can help align individual and collective interests.
Funding and Disclosures
Funding for this research came from the Jan Wallander and Tom Hedelius Foundation. The authors declare no competing interests.
This more about avarice vs altruism. Knowledge in itself is neither benign nor harmful. It is only a tool available for use.
Stock market gains are marginal at best with perfect information. It is the surprise factor that produces unusual gains and loses. Thus the random walk down Wall street.