The Rational Optimist_ How Prosperity Evolves - Matt Ridley [44]
In 2004 Zak, together with Ernst Fehr and other colleagues, conducted one of the most revealing experiments in the history of economics, which showed just how specific the trusting effect of oxytocin is. They recruited 194 male students from Zurich (the experiment must not be done with females, because if one happens to be pregnant without knowing it, oxytocin might trigger labour) and made them play one of two games. In the first game, the trust game, a player called the investor is given twelve monetary units and told that if he hands some of it over to another player, the trustee, that amount will be quadrupled by the experimenter. Thus if he hands over all twelve units, the trustee will receive forty-eight. The trustee may pay some of it back to the investor, but has absolutely no obligation to do so. So the investor risks losing all his money, but if he can trust the trustee to be generous, he might stand to make a good profit. The question is: how much will the investor hand over?
The results were remarkable. Investors who receive a squirt of oxytocin up their noses before the experiment begins hand over 17 per cent more money than those who receive a squirt of inert saline solution up their noses, and the median transfer is ten units rather than eight. The oxytocin investors are more than twice as likely to hand over the full twelve units as the controls. Yet oxytocin has no such effect on the back transfers offered by the trustees, who are just as generous without oxytocin as with. So – as animal experiments have suggested – oxytocin does not affect reciprocity, just the tendency to take a social risk, to go out on a limb. Moreover, a second game, identical to the first except that the generosity of the trustees is randomly decided, shows no effect of oxytocin on the investors. So oxytocin specifically increases trusting, rather than general risk-taking. As with lovers and mothers, the hormone enables animals to take the risk of approaching other members of the species – it ‘links the overcoming of social avoidance with the activation of brain circuits implicated in reward’. It does this partly by suppressing the activity of the amygdala, the organ that expresses fear. If human economic progress has included a crucial moment when human beings learned to treat strangers as trading partners, rather than enemies, then oxytocin undoubtedly played a vital role.
People are surprisingly good at guessing who to trust. Robert Frank and his colleagues set up an experiment in which the volunteer subjects had conversations in groups of three for half an hour. After that, they were sent to separate rooms to play, with their conversation partners, the prisoner’s dilemma game (in which each player must decide whether to cooperate in the hope of a mutual gain or defect in the hope of a selfish gain if the other player cooperates). First, though, each player filled in a form not only saying how she would play with each partner, but also predicting what strategy each partner would adopt. As so often in this game, three-quarters of subjects said they would cooperate, reinforcing Smith’s point that people are innately nice (economics students, who have been taught the self-interested nature of human beings, are twice as likely to defect!). Remarkably, the subjects were very good at predicting who would cooperate and who would defect: people who were predicted to cooperate did so 81 per cent of the time, compared with 74 per cent for the group as a whole. People who were predicted to defect did so 57 per cent of the time, compared with 26 per cent for the group as a whole. Most people, says the economist Robert Frank, can think of