BELIEFS AND MORALS
Just like our primate cousins and other animals, including dogs,
humans have a strong sense of fairness. But that’s not all. Crucially,
unlike our furry friends, we also have a powerful drive to punish others
when we feel they’ve been unfair. Psychologists have demonstrated this
inclination with simple economic games such as the Ultimatum Game
(see box on p.236). These show that people are willing to pay a price
to punish cheats, even if it’s too late to recoup their losses. Moreover,
by comparing games with different rules, research has shown that the
option to punish drives up cooperation, presumably because the threat
of punishment acts as a deterrent to would-be cheats.
The story was made more complicated by a study published in 2008
by Martin Nowak and his co-workers at Harvard University. Using
a game known as the Prisoner’s Dilemma, their research suggested
that reciprocity is more important than punishment when it comes
to increasing gains. Consistent with past research, the introduction
of the option to punish an unfair playing-partner drove up coopera-
tion. However, the most successful players were those who refrained
from punishing their partner, instead adopting a tit-for-tat strategy
matching unfairness with a withdrawal of their own cooperation.
According to David Rand, one of the co-authors of the research,
“winners are those who can stay even-handed and not escalate
conflicts.”
These kinds of dynamics are played out today in real-life contexts
such as the online marketplace eBay, where buyers and sellers depend to
a large degree on trust. There’s a temptation for sellers to take payment
from buyers and withhold sending the purchased goods. However,
this happens only rarely, probably because of the influence of fairness
combined with a reputation based on a comprehensive feedback system.
Indeed, research has shown that buyers are willing to pay more for goods
from sellers with a good reputation.
One drawback of an early version of eBay’s feedback system was that
criticized sellers could retaliate by posting negative feedback about the
disgruntled buyer, even if this was entirely unwarranted. In turn, this
would deter unhappy buyers from criticizing unscrupulous sellers, thus
undermining the whole system. To solve this problem, eBay consulted
the behavioural economists Axel Ockenfelds at the University of Cologne
and Ben Greiner at Harvard. They helped create eBay’s current feedback
system, in which buyers leave anonymous feedback and sellers have to
post feedback about buyers before they can access feedback that’s been
left about them.
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