Paul Zak is director of the Center for Neuroeconomics Studies at Claremont Graduate University. He's one of the researchers studying trust in economic exchanges.
Zak recently looked at oxytocin release while people played a money-transfer game.
In this game, two subjects who can't see each other are assigned the role of investor or trustee. Both start the game with a bankroll, say $12.00. The investor can choose to share some money with the trustee or keep it all. If the investor transfers some money to the trustee, the experimenter will triple that amount.
For example, if the investor gave the trustee $12, the trustee then has $48: the original $12, plus the tripled transfer amount of $36. Giving the trustee some money is a trusting decision. The transfer increases the total amount of money in the game but, if the trustee doesn't return the favor, the investor ends up with less than she started with, while the trustee makes out better.
Zak and his colleagues Robert Kurzban and William Matzner found that when someone got a signal of trust, his or her oxytocin levels rose, while people with higher oxytocin levels were more likely to reciprocate trust.
Zak also has written about the growing lack of trustworthy behavior in business.
HUG: Oxytocin makes it feel good to cooperate. But, as you pointed out in your op-ed piece, more and more businesses are run by bosses who've abandoned human values.
Zak: We all have these predisposition toward being cooperative, and if you look at the long run, cooperation is important. It maintains employee morale, and it improves customer support. If you're a greedy bastard type, you may extract more resources in the short term.
But business schools train people to be self-centered and selfish -- and they don't understand that it's counter to human nature and people don't like it.
HUG: According to one article, you've found that some people are chronic "non-reciprocators," and their character traits are similar to those of sociopaths: They simply do not care about others the way most people do. Can you explain what's different about the way these people's brains use oxytocin?
Zak: Most people are conditional reciprocators; the more money you send them, the more they tend to send back. About 2 percent of our test subjects were non-reciprocators. Oxytocin typically has an off/on sequence. It's released within seconds in response to a social cue, and then production switches off again. But in about 2 percent of my subjects, the ones who never cooperated, their brains appear not to be turning off their oxytocin production. They are way off the curve for their peripheral oxytocin levels.
In addition, they don't seem to respond to oxytocin like other subjects, who reciprocate more strongly the more oxytocin they have. This suggests, although it doesn't prove, that they have a dysfunction in the oxytocin receptors -- the wrong location or inhibited binding -- that causes them to behave like "bastards."
HUG: You also found that women who take part in the trust game while they are ovulating send back substantially less money to their fellow player than other women or than men -- crudely, they are less trustworthy.
Zak: There are caveats to this study, because it was based on half the sample size of our later paper. After you start ovulation, your progesterone is high and, in animals, progesterone inhibits binding oxytocin to its receptor. If oxytocin facilitates social intercourse and social intercourse leads to sexual intercourse, progesterone acts as a bit of a brake to the oxytocin system when you've got an egg on board.
HUG: In "Building Trust," you calculate that a 15 percent increase in the proportion of people who think their compatriots are trustworthy raises per capita output growth by 1 percent for every year thereafter. Would this be true within a single business? In other words, do you think trust is important to corporate culture?
Zak: It's the human beings that make a business; a business organization is itself a small society. When you understand that a society's biggest aspect is its people, you realize that you need to run the business as a society. I think oxytocin has potential part to play in the organization of the workplace.
HUG: What can a business do to create a more oxytocin-rich environment?
Zak: First, something I was so skeptical of as a practicing economist: morale building. Going out to the mountain for the day, helping people bond as a team in a stressful situation.
Second, they should create a much more horizontal female structure. Nowadays, the biggest assets a company has are human assets. People want to feel part of a team.
Give your employees this gift: Letting them know you care about their happiness and how they feel. You will get returns far beyond the small amount of money you spend.