This is the first of a three part interview with neuroeconomist Paul Zak.
By Zack Lynch

The king of trust, Paul Zak, directs the Center for Neuroeconomic Studies at Claremont Graduate University in Los Angeles, where for the past four years he has led a team of economists and neuroscientists to understand how trust influences economic development.

1. Why is trust so important?

Every economic transaction involves some degree of trust. Trust affects everything from personal relationships to global economic development. For example, when you purchase a product, you are trusting that it will work as advertised. As part of the buying process we often evaluate the person on the other side of the counter for a sense of their trustworthiness to help us make our decision. Trust works as an ‘economic lubricant’ that affects everything from personal relationships to global economic development.

2. What is the difference between trust and trustworthiness?

To trust someone involves taking a risk, as you are letting someone else impact what happens to you. Trustworthiness is the trait of deserving trust or confidence. In an economic transaction, the initiating party offers trust while the providing party earns trustworthiness by delivering a good product. In this sense, trustworthiness is the partial reciprocation of trust. (see trust animation)

3. How do you measure something as complex as trust?

In our experiments, we recruit students and pay them $10 for showing up. They then take seats in a large computer lab where they are matched up in pairs. This is done completely anonymously so that no one knows (or will ever know) who the other person is in his or her pair. One half of the then have the opportunity to send none, some, or their entire $10 show-up fee to the other person. All participants are told that what ever they send will be tripled. So, if $4 were sent, the other person would receive $22 ($4 tripled, plus the $10 show-up fee the second person receives).

Next the second person in the pair receives a message telling them the amount sent to them. They can then choose to send some amount back to the first person, or just take the money home. In one of our studies, 85% of the first decision-makers decided to send some of their money to their partner, and 90% of the receivers sent some money back.

4. How did you get interested in the neurobiology of trust?

I wanted to understand the relationship between trust and economic development, so I began building mathematical models of trust. These did a good job of explaining how increasing levels of “generalized trust” in a country correlates to higher standards of living. For example, surveys of trustworthiness show enormous differences across countries, from 3% in Brazil to 65% in Norway.

But these models were unable to explain how two individuals decide to trust each other. There was no human data that identified the neural mechanisms that permits each of us to do something that we do everyday, without ever thinking about it. This is why I started the Center for Neuroeconomic Studies.