Paul H Rubin

Paul H Rubin
Emory University | EU · Department of Economics

Ph.D. Purdue University

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193
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Publications

Publications (193)
Article
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A main tenet of folk economics is the assumption that the world is zero-sum. Many implications stem from this assumption. These include: beliefs regarding taxation; beliefs regarding economic regulation; beliefs regarding inequality; and the core of Marxist economics. Zero-sum folk economic thinking is short-term and deals with distribution; standa...
Article
The authors analyze why research is rewarded in academic institutions where teaching is the primary concern and suggest why even publication in obscure journals may serve as a measure of the worth of an instructor to teaching institutions.
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Widespread emporiophobia (fear of markets) has important policy implications, since it leads voters to demand anti-market policies. There are many reasons for this anti-market attitude; however, economists could reduce emporiophobia if we stressed cooperation rather than competition in writings and policy discussions. In a sample of introductory te...
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Dominance hierarchies (sometimes called “pecking orders”) are virtually universal in social species, including humans. In most species and in ancestral and early human societies, these hierarchies allocate scarce resources, including food and often access to females. Humans sometimes use hierarchies for these allocational purposes, but humans use h...
Chapter
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In this chapter, we argue that applying evolutionary psychology to economics can explain observed 'anomalies' in decision-making. We provide an analysis of the relationships between economics and the evolutionary and biological origin of economic choice, focusing on some selected topics that are of special interest to us. These are: (1) rationality...
Chapter
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Economics has always prided itself on having a unifying theoretical framework based on rational choice theory. However, data from controlled experiments, which often provide theory the best chance to work, refute many of the rationality assumptions that economists make. The evidence against rational choice, as traditionally defined, has forced econ...
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The debate over online privacy pays too little attention to the costs and benefits of the current systems of privacy protection and advertising-supported online applications. The costs of online privacy-related harm (such as identity theft) and of protective activities are small relative to the benefits from applications that are supported by onlin...
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One impetus for reform of the health care system in the United States is that in the U.S. more is spent on medical care than in other countries, with no noticeable difference in results. It is commonly thought that this is a result of a defect in the organization of medicine in the U.S. which can be repaired by “reform.” However, medicine is a labo...
Article
Markets, tort law, and direct regulation are alternative methods of achieving safety. Of these, the market is the most powerful, but it is often ignored in policy discussions. I show that both for the U.S. over time and for the world as a whole, higher incomes are associated with lower death rates, and I discuss some examples of markets creating sa...
Article
This paper was written for a proposed volume on the Experiences of Economics Journal Editors to be edited by Professor Michael Szenberg. In our contribution, we provide some suggestions for authors based on our combined 26 years as American and European editors of Managerial and Decision Economics. Our specific suggestions are: Get the English righ...
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In this paper we use published information to analyze the economic value of Direct to Consumer Advertising (DTCA). The reviewed research finds that DTCA leads to increased demand for the advertised drug and that the effect of the drug tends to be class-wide rather than product specific. There is weak evidence that DTCA may increase compliance and i...
Article
The commercial use of information on the Internet has produced substantial benefits for consumers. But, as the use of information online has increased, so have concerns about privacy. In this paper we argue that acting on those concerns would be counterproductive. Far from a 'free lunch,' more privacy implies less information available for producin...
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It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. Adam Smith, Wealth of Nations As the quote above indicates, economists generally are more comfortable with self interest as a motivating force for social benefit than with altruism. This is because in most...
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In BMW v Gore, the Supreme Court held that a state court's award of punitive damages was so excessive that it violated the Due Process Clause. In three other recent cases, the Court had rejected due process challenges to large awards of punitive damages. Although the Court did not articulate an economic rationale, these four cases are consistent wi...
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We elucidate, connect, and synthesize the literature that employs economics to study the individual rights and freedoms protected by the constitutional amendments comprising the Bill of Rights, especially as they relate to crime. Economics is uniquely suited to studying decisions involving tradeoffs, and each of the amendments requires tradeoffs. E...
Article
There are competing theories as to whether managers learn from stock prices. Dye and Sridhar (2002), for example, argue that capital markets can be better informed than the firm itself, while Roll [Roll, R., 1986, “The hubris hypothesis of corporate takeovers,” Journal of Business 59, 97–216.] argues managers may ignore market signals due to hubris...
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Deception is the manipulation of information to gain some advantage. This paper considers commercial deception through advertising. The paper first discusses the economics of information. The literature has derived four major policy conclusions. First, truthful information regarding price should not be restricted by regulatory authorities. Second,...
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Item-pricing laws (IPLs) require a price tag on every item sold by a retailer. We study IPLs and assess their efficiency by quantifying their costs and comparing them to previously documented benefits. On the cost side, we posit that IPLs should lead to higher prices because they increase the costs of pricing and price adjustment. We test this pred...
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Tort reform may not affect all segments of society equally. Studies have shown that many tort reforms disproportionately reduce compensation to women, children, the elderly, disadvantaged minorities, and less affluent people. This study goes beyond tort reform’s disproportionate effect on compensation, to explore whether tort reform also has a di...
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Prominent in arguments opposing preemption of state tort law liability for alleged inadequacies in prescription drug labeling is the argument that such liability can complement FDA regulation by improving on a regulatory scheme that fails to provide adequate deterrence against the marketing of unsafe or inadequately labeled drugs. The premise of th...
Chapter
IntroductionInstitutional StructureCapital Market Explanations of FranchisingAn Alternative ExplanationAdditional IssuesSummary
Article
Though Hamilton's rule is commonly interpreted as relating to two individuals, an alternative interpretation is that it can apply to an altruistic act with respect to a large group of related persons, such as an ethnic group. Then provision of a public good to such a group can be explained by Hamilton's rule. An important class of public goods is t...
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The academic debate over the deterrent effect of capital punishment has intensified again with a major policy outcome at stake. About two dozen empirical studies have recently emerged that explore the issue. Donohue and Wolfers (200523. Donohue , J and Wolfers , J . 2005. Uses and abuses of empirical evidence in the death penalty debate. Stanford...
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Recent efforts to regulate the use of Customer Proprietary Network Information (CPNI) attempt to address consumer concerns regarding privacy and possible fraudulent use of information. However, the FCC rulemaking issued earlier this year would do little to curtail illegal uses of CPNI. The FCC itself acknowledges that there is no evidence of unauth...
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This is an op-ed from the May 7, 2007 Washingtonpost.com. I argue that our evolved attitudes and preferences have influences on public policy. I use the example of the international economy - including immigration and trade - to illustrate this argument. Our evolved intuition is for a zero-sum world and when we apply this intuition to these issues...
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Theory suggests that tort reform could have two possible impacts on accidents. Reforms could increase accidents as tortfeasors internalize less of the cost of externalities and have less incentive to reduce the risk of accidents. Alternatively, tort reforms could decrease accidents as lower expected liability costs result in lower prices, enabling...
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The battle over immigration reform is a recent manifestation of a long debate over the relationship between the United States and other countries. To economists, these issues are easy. Since at least the work of David Ricardo (1772-1823), economists have known that international trade is desirable and beneficial for both trading partners. But the c...
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Stale CAFE By Paul Godek, Competition Policy Associates Not only does CAFE set minimum average fleet gas mileage standards for firms selling passenger vehicles in the United States, the standards apply separately to two sources of vehicles - domestically-produced and imported. The reason for that distinction lies in the political influence of organ...
Preprint
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SYNOPSIS: We seek to characterize the evolutionary role played by the transactional record that is the foundation of modern accounting. We theorize that systematic rec-ordkeeping crystallizes memory and, along with other institutions (e.g., law, weights, and measures), promotes the trust necessary for large-scale human cooperation. Our theory yield...
Article
The present value of the costs of injuries and deaths associated with each unit of a product is a useful number in conducting cost-benefit analysis at the CPSC. Before a remedy is known, this value indicates the approximate amount that it is worth spending on a fix; similarly, if a fix is proposed, this number indicates whether it is cost-justified...
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Data security breaches have received considerable public attention of late, and have prompted several states to mandate that firms whose data may have been compromised to notify their customers of the security breaches. This study finds that the costs of a notification requirement are likely to be substantially higher than the benefits. Even for co...
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Without Abstract
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According to Paul Rubin, John Donohue and Justin Wolfers mischaracterize his analysis of the death penalty.
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Donohue and Wolfers comment on an article where I was a coauthor. There are some errors and misstatements in their article that should be corrected.
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Assuming that interest groups, like households, firms, or any other structured organization, have limited budgets but broad objectives, how do they pick and choose which battles to fight? The issue of interest group battle choice has received little direct attention in the literature, in large part because defining the state space of total interest...
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There is a substantial literature in medical journals examining the marketing and promotional efforts of pharmaceutical firms. This literature is generally critical of those efforts, focusing on the negative aspects of promotion. Although the literature is expressed in empirical and scientific terms and makes use of data, it suffers from some weakn...
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In this paper, we examine the costs and benefits of laws requiring businesses to notify consumers if their private data is compromised, such as the law in California and other state and federal laws recently passed or proposed. Identity theft and related frauds do not seem to be increasing in recent years, and may be decreasing. A 2004 Survey finds...
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This paper was published in Regulation in 1995, Number 4. It is an argument in favor of replacement of tort with contract for harmful events where the parties have a pre-injury relationship. It provides some speculation about what such law would look like. In particular, I argue that parties would probably not want to be able to sue for nonpecuniar...
Article
The common law originally was thought to be immune to rent seeking. More recently, scholars have recognized that attorneys are engaged in exactly that activity. Rent seeking by the legal profession has greatly expanded the scope of US tort law, and generated efforts to reverse its expansion. Organized groups (attorneys, businesses and doctors) are...
Article
Both the Food and Drug Administration and the Centers for Disease Control are very concerned about the emergence of antibiotic-resistant bacteria. Both agencies advocate reducing the use of antibiotics in order to slow down or prevent this selection pressure for resistant bacteria. That is, the agencies advocate reduction in demand in order to slow...
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Pinker, 2002) and denied the influence of biology on human actions. Moreover, Hayek got the basic outline of the problem right. Most of human existence has been spent in small groups (25-250 members) and many of our tastes and preferences have evolved in that setting. These tastes and preferences are not always adapted for modern mass societies wit...
Chapter
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Recent changes in the former communist countries have demonstrated the importance of a legal system for economic progress. A legal system defines property rights, allows for exchange of property rights, and protects property rights. Countries with a rule of law and well established property rights are more prosperous and grow more quickly than coun...
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An econometric study of all felony cases filed in Denver, Colorado, in 2002, shows that public defenders achieved poorer outcomes than their privately retained counterparts, measured by the actual sentences defendants received. But this study suggests that the traditional explanation for this difference - underfunding resulting in overburdened publ...
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Every year, the states vote on a national high school debate topic. The topic chosen for the 2005-2006 academic year is 1 : Resolved: The United States federal government should substantially decrease its authority … to search without probable cause. The topic relates directly to the Fourth Amendment of the U.S. Constitution which states: The right...
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Efficiency is the key organizing principle behind law and economics. However, there are two senses in which the term is used, and it is useful to separate them. Initially as used by Posner, the term referred to particular rules, and it was argued that rules were generally efficient. I call this "micro" efficiency The evolutionary models of legal ch...
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We analyze decision-making in a simple model of the judicial hierarchy. We assume that trial court judges are more concerned with ex post efficiency with respect to the individuals involved in the cases at hand, and less concerned with ex ante efficiency with respect to the precedents established for society, than are appeals court judges. This imp...
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We study item-pricing laws (which require that each item in a store be individually marked with a price sticker) and examine and quantify their costs and benefits. On the cost side, we argue that item-pricing laws increase the retailers’ costs, forcing them to raise prices. We test this prediction using data on retail prices from large supermarket...
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Pharmaceutical sales representatives provide useful information about products, but they have incentives to be overly positive. The literature written by physicians about pharmaceutical marketing and promotion generally focuses on the harmful aspects of promotion, and misses the benefits. This suspected harm occurs because physicians who have conta...
Article
A model of the cultural co-evolution of honesty and capital is analyzed. It is shown that the sign of the payoff differential between honest and dishonest types depends on the ratio of benefits that an employee gets from shirking to the resulting loss of revenue to the firm. If this ratio decreases with capital accumulation, then multiple equilibri...
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Ideology is a thorn in the side of public choice. The discipline would be more powerful and more useful if it were not true that ideological factors were important in explaining political behavior. This is true for at least two reasons. First, public choice applies economic methods and theories to political behavior. But economic theory has no theo...
Chapter
In economic theory, tastes are taken as exogenous and outside the system. This leads to a certain looseness in theorizing; it is tempting to explain anomalous behavior by adding a particular taste to the utility function. For standard economic behavior this practice is relatively harmless, as goods are easily recognizable. However, for certain type...
Book
This article indicates that, while the initial security breach typically is offline, identity thieves areusing the services of commercial online data brokers
Article
The literature written by physicians about pharmaceutical marketing and promotion generally views this activity as harmful. This harm supposedly occurs because physicians who have contact with pharmaceutical sales representatives sometimes change their prescribing behavior. However, this result says nothing about the benefits of this change in beha...
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Folk economics is the intuitive economics of untrained people. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs...
Article
Folk economics is the intuitive economics of untrained people. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors m circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs o...
Article
Evidence on the deterrent effect of capital punishment is important for many states that are currently reconsidering their position on the issue. We examine the deterrent hypothesis using county-level, post-moratorium panel data and a system of simultaneous equations. The procedure we employ overcomes common aggregation problems, eliminates the bia...
Article
Folk economics is the intuitive economics of untrained people. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs...
Article
In 1961, in its Mapp v. Ohio to ruling, the Supreme Court required every state to exclude from criminal trials evidence obtained in violation of the Fourth Amendment. This is the "exclusionary rule." At the time the Supreme Court issued its ruling, 24 states allowed ill-gotten evidence in their criminal trials, and 24 excluded it. An economic analy...
Article
So far 33 states have adopted right-to-carry concealed handgun laws. The advocates argue these laws have a deterrent effect on crime, while the opponents believe they facilitate crime by increasing gun availability. Although both sides assume that these laws affect behavior, no attempt has yet been made to model such effects using crime theory. Con...
Article
Full-text available
Evidence on the deterrent effect of capital punishment is important for many states that are currently reconsidering their position on the issue. We examine the deterrent hypothesis by using county-level, postmoratorium panel data and a system of simultaneous equations. The procedure we employ overcomes common aggregation problems, eliminates the b...
Chapter
Altruism is something of a puzzle to economists. While in theory the elements of the utility function are left unspecified, it is generally assumed that private goods consumed by the individual himself are the most important components. If not, then it becomes difficult to make falsifiable predictions and so scientific advance becomes impeded. None...
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Theories of the size of government focus on either the demandfor government or the supply of tax revenues. Demand sidetheories such as those of Peltzman, Meltzer and Richard,Husted and Kenny, and Lott and Kenny are essentially politicaltheories. They emphasize the role of voters or interest groupsin expanding government. Supply side theories such a...
Article
We use event study methodology to examine the effects of product liability litigation on firms in the automobile and pharmaceutical industries. We find that the filing of a lawsuit, or news stories that subsequently lead to the filing of a lawsuit, is associated with significant losses in firm value. These losses are approximately equal to the uppe...
Chapter
The purpose of this study has been to apply standard economic reasoning to the question of whether to impose new regulation on the commercial market for personal information. We have found that the commercial market for information appears to be working well and responding to consumers’ concerns. Despite perceptions to the contrary, there is a stri...
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This book presents an evaluation of proposals to increase government regulation of the commercial use of personal information. Such proposals would require, for example, that companies provide specific notifications about their information management practices, or obtain the “opt-in” permission of consumers before collecting or using information ab...
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The last two chapters demonstrated that markets for commercial information are responding to consumers concerns and preferences with respect to privacy. There appears to be no evidence of market failure, or even of harm to consumers. There are, nonetheless, proposals for regulation, most prominently from the Federal Trade Commission.128 The Nationa...
Chapter
Although the Internet is still very young — commercial use of the medium did not begin to develop until the mid-1990s — market forces are moving rapidly to provide the privacy desired by consumers, in part by eliminating problems of asymmetric information. Perhaps most importantly, firms that do business on the Internet are discovering that there a...
Chapter
The absence of serious market failure or consumer harm suggests that the potential benefits of new privacy regulations are very small. We, therefore, focus on the potential costs of such regulations. We first discuss some general problems that are likely to occur if this market is subject to more regulation and then examine in greater detail the pr...
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Markets can “fail” for a variety of reasons and the result is that either “too much” or “too little” of a good is produced. Implicit in the proposals to regulate the market for personal information is the view that there is a failure in the market for personal information resulting in “too much” information being produced, disseminated and used. Ec...
Chapter
This chapter examines the functioning of the market for commercial information and the benefits it provides for consumers. The markets discussed here were important before the Internet, but the Internet has greatly increased their efficiency and scope.
Article
Pharmaceutical companies have greatly increased their level of "direct-to-consumer" (DTC) advertising in recent years. For 1998, estimates are that over $1.1 billion was spent on this form of advertising, increased from $850 million in 1997 and $600 million in 1996. In 1998, 84 separate drugs were advertised to consumers. The impetus was a decision...
Article
To change the law, an interest group must choose between lobbying the legislature and litigating for new precedent. Lobbying becomes more likely as the relative benefits from rule change become greater, as the costs of lobbying become smaller and as the voting strength of the interest groups becomes larger. Litigating becomes more likely as trial c...
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It is often argued that ethnic conflict is an extreme example of nepotism, and is genetically based. This may be so: in the EEA (the environment of evolutionary adaptedness), such conflict may have been fitness improving, and we may be descended from those who participated successfully in such conflicts. This would provide us with a ''taste'' for x...
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Several evolutionary mechanisms have been identified in the literature that would generate altruism in humans. The most powerful (except for kin selection) and most controversial is group selection, as recently analyzed by Sober & D.S. Wilson. I do not take a stand on the issue of the existence of group selection. Instead, I examine the level of hu...
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This book is a very important analysis of ideology and probably the most significant public choice analysis of Congress. It is an examination of roll call voting by the House and Senate from the first Congress in 1789 to 1985. Every individual vote on every roll call is part of the data set. The book is based on numerous articles by these authors a...
Article
An agency conflict arises when consumers rely on middlemen for product recommendations. Although consumers want the middlemen to recommend the most suitable product, the middlemen may earn a higher profit if the consumer buys another product. One setting where this conflict arises is the managed health care market. Managed health care providers hav...
Article
An agency conflict arises when consumers rely on middlemen for product recommendations. Although consumers want the middlemen to recommend the most suitable product, the middlemen may earn a higher profit if the consumer buys another product. One setting where this conflict arises is the managed health care market. Managed health care providers hav...
Article
In this Article I address the appropriate source of liability in cases of injury between parties with a pre-injury contractual relationship. This applies to product liability (for direct purchasers, not for injured third parties) and also to medical malpractice. Since the parties do have a pre-injury relationship, they could contract ex ante for da...
Article
Many previous event studies have found unexpectedly large losses to firms involved in negative incidents. Many of these studies' authors explain such losses as "goodwill losses" or "reputation effects." To test this hypothesis, we search for residual losses (in excess of direct costs) to firms involved in events which produce ill will, but do not a...
Article
An issue that must be resolved under any health insurance policy is the locus of decisions on treatment. There will be times when a patient may want some treatment that the insurance company (HMO) will not want to provide. There may be other situations when a decision must be made about the amount to spend on care; two issues that come to mind are...

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Arguing that People are not natural economists, and commit the Zero Sum error. By emphasizing competition, economists have contributed to this error. The economy is actually much more cooperative than it is competitive.