Thursday, December 06, 2012

Morals and Markets

Detecting the Trustworthiness of Novel Partners in Economic Exchange

David DeSteno et al.
Psychological Science, forthcoming

Because trusting strangers can entail high risk, an ability to infer a potential partner's trustworthiness would be highly advantageous. To date, however, little evidence indicates that humans are able to accurately assess the cooperative intentions of novel partners by using nonverbal signals. In two studies involving human-human and human-robot interactions, we found that accuracy in judging the trustworthiness of novel partners is heightened through exposure to nonverbal cues and identified a specific set of cues that are predictive of economic behavior. Employing the precision offered by robotics technology to model and control humanlike movements, we demonstrated not only that experimental manipulation of the identified cues directly affects perceptions of trustworthiness and subsequent exchange behavior, but also that the human mind will utilize such cues to ascribe social intentions to technological entities.

An actual version of this experiment:  would YOU trust THIS man?

(The correct answer is "yes," btw.)


Are social preferences related to market performance?

Andreas Leibbrandt
Experimental Economics, December 2012, Pages 589-603

This paper combines laboratory with field data from professional sellers to study whether social preferences are related to performance in open-air markets. The data show that sellers who are more pro-social in a laboratory experiment are also more successful in natural markets: They achieve higher prices for similar quality, have superior trade relations and better abilities to signal trustworthiness to buyers. These findings suggest that social preferences play a significant role for outcomes in natural markets.

(Interesting note for Mr. Overwater:  being pro-social is adaptive, even (especially) in a market setting.

Nod to Kevin Lewis

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