Alternatives to Punishment: The power to annul an economic exchange promotes self- rather than other-regarding preferences in fairness and trust games

Fairness and trust appraisals that engender economic exchange rely on thoughts about another person’s mind to satisfy self- (profit maximising) and other-regarding (social motives) preferences. Punishment should promote fairness and trust within economic exchange, guarding against free-riding and trust violations, but depends on other-regarding preferences concerned with the violator. Here, we explore an alternative to punishment that may instead promote self-regarding preferences—the opportunity for the decision-maker to annul (veto) the economic transaction. We test this veto approach by having participants assume the role of investor(s) in modified versions of the public goods (Studies one and three) and trust games (Studies two and four). Across four studies both online and in laboratory with two economic games, investor(s) could veto a transaction—annul a previous exchange—if the return from the other player(s) was deemed unsatisfactory. We find that this manipulation increased investment by the investor(s), consistent with games where second-party punishment is possible. Moreover, self-regarding preferences predicted veto behaviour, while other-regarding preferences predicted punishment behaviour. We argue that this veto approach can be an alternative to punishment that can safe-guard fairness and trust during economic exchange.

Cooperating to show that you care: costly helping as an honest signal of fitness interdependence

Social organisms often need to know how much to trust others to cooperate. Organisms can expect cooperation from another organism that depends on them (i.e. stake or fitness interdependence), but how do individuals assess fitness interdependence? Here, we extend fitness interdependence into a signalling context: costly helping behaviour can honestly signal one's stake in others, such that those who help are trusted more. We present a mathematical model in which agents help others based on their stake in the recipient's welfare, and recipients use that information to assess whom to trust. At equilibrium, helping is a costly signal of stake: helping is worthwhile for those who value the recipient (and thus will repay any trust), but is not worthwhile for those who do not value the recipient (and thus will betray the trust). Recipients demand signals when they value the signallers less and when the cost of betrayed trust is higher; signal costs are higher when signallers have more incentive to defect. Signalling systems are more likely when the trust games resemble Prisoner's Dilemmas, Stag Hunts or Harmony Games, and are less likely in Snowdrift Games. Furthermore, we find that honest signals need not benefit recipients and can even occur between hostile parties. By signalling their interdependence, organisms benefit from increased trust, even when no future interactions will occur. This article is part of the theme issue ‘The language of cooperation: reputation and honest signalling’.

Watching, being watched, and human interactions: evidence from trust games

Face-to-face communication increases human trust, which is crucial for making important decisions with others. Due to technological breakthroughs and the COVID-19 pandemic, human interactions now predominantly occur online, leading to two situations: other peoples’ faces cannot be seen, but yours can, and vice versa. However, the relationships among watching, being watched, and face-to-face interaction are unclear in existing papers. This paper separately measures the effects of both watching and being watched on human interactions using a trust game. I derive the optimal behaviors of senders and receivers in the trust game and empirically validate it through a controlled experiment. The results show that more than half of the participants perform the optimal behavior. They also indicate that both watching and being watched enhance human trust and reciprocity, while the synergy effect of face-to-face is not observed. Additionally, women reciprocate more when they are watched, and trust increases when participants are paired with the opposite gender and can watch their partner. This paper theoretically concludes that the former comes from women’s social pressure that they should be reciprocators, and the latter from participants’ beliefs that the opposite gender reciprocates more than the same gender does. These results propose a framework based on watching and being watched affecting human behaviors and emphasize the importance of face-to-face communication in online human interactions.

A cooperative culture may affect trustworthiness assessments derived from the human face

Trust is crucial for successful social interactions and personal well-being. Among the many mechanisms potentially favoring the evolution of trust, spillovers of social institutions on subsequent behavior have received little attention within evolutionary psychology. Although a plethora of research has investigated pro-social spillovers in economic experiments, research has thus far largely overlooked the impact of spillovers on person perception. Additionally, given that most studies on such spillovers use one-off measurement of the subsequent behavior, the stability of pro-social spillovers over time has not been investigated so far. In a three-stage laboratory experiment (n = 208), we provide evidence that pro-social spillovers occur even when perceptual cues provide an additional source of information to base decisions on. In Stage 1, participants played a series of trust games against unknown, videotaped targets to assess their baseline trust behavior against strangers, taking into account their trust perception. Subsequently, we randomly exposed them to a repeated prisoner’s dilemma in which cooperation is either favored (“C-culture”) or discouraged (“D-culture”). In the final stage – another series of 30 trust decisions against different targets – participants from the “C-culture” initially respond with higher levels of trust. This spillover effect, however, is short-lived and behavior converges back to the pre-intervention levels. Thus, our findings confirm pro-social spillovers even when participants behavior may also be influenced by perceptual cues but raise the question about their temporal stability. We complemented the experiment with an independent survey (n = 132) on the trustworthiness of the targets. Results show that these perception affects quickly gain predictive quality, suggesting the intervention effect only temporarily crowds out the trustworthiness perception as a key driver of trust behavior.

Interpersonal Closeness Impairs Decision Memory

We hypothesized that self-other confusion as a result of interpersonal closeness impairs people’s memory of their own decisions. Four studies (min N = 352) tested whether closeness affects memory in cooperative decisions. Participants played trust games in which they entrusted resources to another person and then had to recall their own decisions. Study 1 showed that people with an independent self-construal recalled their decisions more accurately, suggesting that less self-other overlap results in higher accuracy. Studies 2–4 showed that people made more recall errors when they played the trust game with a close in comparison with a distant partner. The findings suggest that interpersonal closeness impairs people’s memory of cooperative decisions.

Facial Stereotype Bias Is Mitigated by Training

People automatically infer others’ personality (e.g., trustworthiness) based on facial appearance, and such facial stereotype biases predict real-world consequences across political, legal, and business domains. The present research tested whether these biases can be mitigated through counterstereotype training aimed at reconfiguring the associations between specific facial appearances and social traits. Across six studies and a replication, a behavioral counterstereotype training consistently reduced or eliminated facial stereotype biases for White male faces in the context of economic trust games, hiring decisions, and even automatic evaluations assessed via evaluative priming. Together, the results demonstrate a fundamental malleability in facial stereotyping related to trustworthiness, with a minimal training able to mitigate the tendency to activate and apply long-held, highly automatized facial stereotypes. These findings suggest that face impressions are more flexible than typically appreciated, and they provide a potential inroad toward combating our ingrained biases based on facial appearance.

The Use and Misuse of Coordinated Punishments*

Communication facilitates cooperation by ensuring that deviators are collectively punished. We explore how players might misuse communication to threaten one another, and we identify ways that organizations can deter misuse and restore cooperation. In our model, a principal plays trust games with a sequence of short-run agents who communicate with each other. An agent can shirk and then extort pay by threatening to report that the principal deviated. We show that these threats can completely undermine cooperation. Investigations of agents’ efforts, or dyadic relationships between the principal and each agent, can deter extortion and restore some cooperation. Investigations of the principal’s action, on the other hand, typically do not help. Our analysis suggests that collective punishments are vulnerable to misuse unless they are designed with an eye toward discouraging it.