Real News in Neuroeconomics
By Arnold Kling
While the press is back to wallowing in Watergate, the big news in economics was a small experiment.
In the game, investors were allotted 12 monetary credits, each worth 40 Swiss centimes (32 US cents), and asked to decide how much to give to the trustee. The participants knew that the investment would be quadrupled, and that the trustee could then decide how much, if any, to hand back.
Investors were more willing to part with their cash when they inhaled the potion, Fehr’s team reports in Nature. Of 29 subjects given oxytocin, 13 handed over all of their cash. Only 6 of the 29 subjects given a placebo to sniff invested all 12 of their credits.
When the human trustee was replaced with a random number generator the effect disappeared. This shows, the researchers say, that oxytocin specifically boosts social interactions, rather than simply making people more willing to take risks.
For Discussion. What do you think will be the first practical application of this finding?