Urs Fischbacher

Oxytocin Increases Trust in Humans

Trust pervades human societies. Trust is indispensable in friendship, love, families and organizations, and plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a countrys institutions and leaders, political legitimacy breaks down. Much recent evidence indicates that trust contributes to economic, political and social success. Little is known, however, about the biological basis of trust among humans. Here we show that intranasal administration of oxytocin, a neuropeptide that plays a key role in social attachment and affiliation in non-human mammals, causes a substantial increase in trust among humans, thereby greatly increasing the benefits from social interactions. We also show that the effect of oxytocin on trust is not due to a general increase in the readiness to bear risks. On the contrary, oxytocin specifically affects an individuals willingness to accept social risks arising through interpersonal interactions. These results concur with animal research suggesting an essential role for oxytocin as a biological basis of prosocial approach behaviour.

A Theory of Reciprocity

This Paper presents a formal theory of reciprocity. Reciprocity means that people reward kind actions and punish unkind ones. The theory takes into account that people evaluate the kindness of an action not only by its consequences but also by the intention underlying this action. The theory explains the relevant stylized facts of a wide range of experimental games. Among them are the ultimatum game, the gift-exchange game, a reduced best-shot game, the dictator game, the prisoners dilemma, and public goods games. Furthermore, the theory explains why the same consequences trigger different reciprocal responses in different environments. Finally, the theory explains why in bilateral interactions outcomes tend to be ‘fair’ whereas in competitive markets even extremely unfair distributions may arise.

Third Party Punishment and Social Norms

We examine the characteristics and relative strength of third-party sanctions in a series of experiments. We hypothesize that egalitarian distribution norms and cooperation norms apply in our experiments, and that third parties, whose economic payoff is unaffected by the norm violation, may be willing to enforce these norms although the enforcement is costly for them. Almost two-thirds of the third parties indeed punished the violation of the distribution norm and their punishment increased the more the norm was violated. Likewise, up to roughly 60% of the third parties punished violations of the cooperation norm. Thus, our results show that the notion of strong reciprocity extends to the sanctioning behavior of ‘‘unaffected’’ third parties. In addition, these experiments suggest that thirdparty punishment games are powerful tools for studying the characteristics and the content of social norms. Further experiments indicate that second parties, whose economic payoff is reduced by the norm violation, punish the violation much more strongly than do third parties.

Oxytocin Shapes the Neural Circuitry of Trust and Trust Adaptation in Humans

Trust and betrayal of trust are ubiquitous in human societies. Recent behavioral evidence shows that the neuropeptide oxytocin increases trust among humans, thus offering a unique chance of gaining a deeper understanding of the neural mechanisms underlying trust and the adaptation to breach of trust. We examined the neural circuitry of trusting behavior by combining the intranasal, double-blind, administration of oxytocin with fMRI. We find that subjects in the oxytocin group show no change in their trusting behavior after they learned that their trust had been breached several times while subjects receiving placebo decrease their trust. This difference in trust adaptation is associated with a specific reduction in activation in the amygdala, the midbrain regions, and the dorsal striatum in subjects receiving oxytocin, suggesting that neural systems mediating fear processing (amygdala and midbrain regions) and behavioral adaptations to feedback information (dorsal striatum) modulate oxytocins effect on trust. These findings may help to develop deeper insights into mental disorders such as social phobia and autism, which are characterized by persistent fear or avoidance of social interactions.

Social norms and human cooperation

The existence of social norms is one of the big unsolved problems in social cognitive science. Although no other concept is invoked more frequently in the social sciences, we still know little about how social norms are formed, the forces determining their content, and the cognitive and emotional requirements that enable a species to establish and enforce social norms. In recent years, there has been substantial progress, however, on how cooperation norms are enforced. Here we review evidence showing that sanctions are decisive for norm enforcement, and that they are largely driven by non-selfish motives. Moreover, the explicit study of sanctioning behavior provides instruments for measuring social norms and has also led to deeper insights into the proximate and ultimate forces behind human cooperation.

Strong reciprocity, human cooperation, and the enforcement of social norms

This paper provides strong evidence challenging the self-interest assumption that dominates the behavioral sciences and much evolutionary thinking. The evidence indicates that many people have a tendency to voluntarily cooperate, if treated fairly, and to punish noncooperators. We call this behavioral propensity “strong reciprocity” and show empirically that it can lead to almost universal cooperation in circumstances in which purely self-interested behavior would cause a complete breakdown of cooperation. In addition, we show that people are willing to punish those who behaved unfairly towards a third person or who defected in a Prisoner’s Dilemma game with a third person. This suggests that strong reciprocity is a powerful device for the enforcement of social norms involving, for example, food sharing or collective action. Strong reciprocity cannot be rationalized as an adaptive trait by the leading evolutionary theories of human cooperation (in other words, kin selection, reciprocal altruism, indirect reciprocity, and costly signaling theory). However, multilevel selection theories of cultural evolution are consistent with strong reciprocity.

A Nation-Wide Laboratory: Examining Trust and Trustworthiness by Integrating Behavioral Experiments into Representative Surveys

Typically, laboratory experiments suffer from homogeneous subject pools and selfselection biases. The usefulness of survey data is limited by measurement error and by the questionability of their behavioral relevance. Here we present a method integrating interactive experiments and representative surveys thereby overcoming crucial weaknesses of both approaches. One of the major advantages of our approach is that it allows for the integration of experiments, which require interaction among the participants, with a survey of non-interacting respondents in a smooth and inexpensive way. We illustrate the power of our approach with the analysis of trust and trustworthiness in Germany by combining representative survey data with representative behavioral data from a social dilemma experiment. We identify which survey questions intended to elicit peoples trust correlate well with behaviorally exhibited trust in the experiment. People above the age of 65, highly skilled workers and people living in bigger households exhibit less trusting behavior. Foreign citizens, Catholics and people favoring the Social Democratic Party or the Christian Democratic Party exhibit more trust. People above the age of 65 and those in good health behave more trustworthy or more altruistically, respectively. People below the age of 35, the unemployed and people who say they are in favor of none of the political parties behave less trustworthy or less altruistically, respectively.

Parochial altruism in humans

Social norms and the associated altruistic behaviours are decisive for the evolution of human cooperation and the maintenance of social order, and they affect family life, politics and economic interactions. However, as altruistic norm compliance and norm enforcement often emerge in the context of inter-group conflicts, they are likely to be shaped by parochialism—a preference for favouring the members of ones ethnic, racial or language group. We have conducted punishment experiments, which allow ‘impartial’ observers to punish norm violators, with indigenous groups in Papua New Guinea. Here we show that these experiments confirm the prediction of parochialism. We found that punishers protect ingroup victims—who suffer from a norm violation—much more than they do outgroup victims, regardless of the norm violators group affiliation. Norm violators also expect that punishers will be lenient if the latter belong to their social group. As a consequence, norm violations occur more often if the punisher and the norm violator belong to the same group. Our results are puzzling for evolutionary multi-level selection theories based on selective group extinction as well as for theories of individual selection; they also indicate the need to explicitly examine the interactions between individuals stemming from different groups in evolutionary models.

Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game

We study indirect reciprocity and strategic reputation building in an experimental helping game. At any time only half of the subjects can build a reputation. This allows us to study both pure indirect reciprocity that is not contaminated by strategic reputation building and the impact of incentives for strategic reputation building on the helping rate. We find that while pure indirect reciprocity appears to be important, the helping choice seems to be influenced at least as much by strategic considerations. Strategic do better than non-strategic players and non-reciprocal do better than reciprocal players, casting doubt on previously proposed evolutionary explanations for indirect reciprocity.

Neuroeconomic Foundations of Trust and Social Preferences: Initial Evidence

Neuroeconomics merges methods from neuroscience and economics to better understand how the human brain generates decisions in economic and social contexts. Neuroeconomics is part of the general quest for microfoundations—in this case, the microfoundation of individual decision-making in social contexts. The economic model of individual decision-making is based on three concepts: the action set, preferences, and beliefs. Economists assume that an individual will choose his preferred action for a given set of available actions and a given belief about the states of the world and the other players’ actions. Neuroeconomics provides a microfoundation for individual beliefs, preferences, and behavior; it does so by examining the brain processes associated with the formation of beliefs, the perception of the action set, and the actual choice. Moreover, since the set of available actions can be framed in different ways and different frames of the same action set sometimes elicit different behaviors, neuroeconomics may also contribute to a deeper understanding of framing effects. This paper discusses recent neuroeconomic evidence related to other-regarding (nonselfish) behaviors and the decision to trust in other people’s nonselfish behavior. As we will show, this evidence supports the view that people derive nonpecuniary utility (i) from mutual cooperation in social dilemma (SD) games and (ii) from punishing unfair behavior in these games. Thus, mutual cooperation that takes place despite strong free-riding incentives, and the punishment of free riders in SD games is not irrational, but better understood as rational behavior of people with corresponding social preferences. Finally, we report the results of a recent study that examines the impact of the neuropeptide oxytocin (OT) on trusting and trustworthy behavior in a sequential SD. Animal studies have identified OT as a hormone that induces