Trust me, I'm a Swiss professor
WORLD OF SCIENCE - BOB BROCKIE
The Dominion Post | Monday, 22 September 2008
Swiss professor Ernst Fehr is renowned for his research into warm fuzzies, fair-mindedness and punishment.
He gave groups of people money to play "public good" games that mimic life. The rules keep changing, chemicals are blown up noses, players must make selfish or selfless choices and punishments are meted out. As director of the Institute for Empirical Research in Economics at Zurich University, the professor mixes economics with evolutionary and mathematical game theory. He is interested in how we read each other's minds and intentions and how trust develops.
Our brains produce a natural chemical, oxytocin, which triggers warm fuzzy feelings during sex or breast-feeding. Professor Fehr wanted to know if the chemical affected business deals, so tailored games in which players could choose between investing money with a trustee in return for a guaranteed small profit or striking out on their own with no holds barred and possibly making bigger profits. The rules allowed players to cheat or rip each other off. Professor Fehr then blew puffs of oxytocin up half their noses and, sure enough, the chemical made the players more trustful. If it were blown up the noses of businessmen, he thinks it would make for easier, more endurable deals.
More recently, Professor Fehr and his team investigated the early growth of fair- mindedness by offering Smarties, jellybeans and fizzers to 229 children between the ages of three and eight. They found that at age three children are inherently selfish, but by age eight most have developed a sense of fairness, sharing goodies equally. Such behaviour sets humans apart from chimpanzees, which remain selfish throughout their lives.
In other experiments, players could choose between games in which cheats and free-loaders were punished and games in which they were not. Most chose to play punishment-free games but soon learned that the games were chaotic and unsustainable. After a few rounds they saw the advantages of penalties, switched games and learned to cooperate to become trusting law-enforcers themselves. "Strong reciprocators" went to considerable personal expense to punish defectors. Their "altruistic punishment" maintained the public good.
Apart from these researches, Professor Fehr directs an institute in Vienna, is a professor at Massachusetts Institute of Technology, vice- president of the European Economic Association, edits several journals and has written books about high wages, wage rigidity, contracts and market interactions.
Professor Fehr shows that we cannot turn a blind eye to selfish cheats, bludgers and rorters. If they go unpunished, trust goes out the window and relations between parents and children, husbands and wives, neighbours, communities, corporations, and a country's institutions become chaotic.
The professor says that if we want to get along with each other we should abide by the equation:
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