Trustworthiness and Motivations

Trust can be thought of as a three place relation: A trusts B to do X. Trustworthiness has two components: competence (does the trustee have the relevant skills, knowledge and abilities to do X?) and willingness (is the trustee intending or aiming to do X?). This chapter is about the willingness component, and the different motivations that a trustee may have for fulfilling trust. The standard assumption in economics is that agents are self-regarding, maximizing their own consumption of goods and services. This is too restrictive. In particular, people may be concerned with the outcomes of others, and they may be concerned to follow ethical principles. I distinguish weak trustworthiness, which places no restrictions on B’s motivation for doing X, from strong trustworthiness, where the behaviour must have a particular non-selfish motivation, in finance the fiduciary commitment to promote the interests of the truster. I discuss why strong trustworthiness may be more efficient and also normatively preferable to weak. In finance, there is asymmetric information between buyer and seller, which creates a need for trustworthy assessment of products. It also creates an ambiguity about whether the relationship is one of buyer and seller, governed by caveat emptor, or a fiduciary relationship of advisor and client. This means that there are two possible reasons why trust may be breached: because the trustee didn’t realise that the truster framed the relationship as a fiduciary one, or because the trustee did realise but actively sought to take advantage of the trust. Correspondingly, there are two possible types of agent: normal people who are not always self-regarding and who are trust responsive (if they believe that they are being trusted then they are likely to fulfill that trust), and knaves, after Hume’s character who is always motivated by his own private interest. We can increase the trustworthiness of normal people by getting them to re-frame the situation as one of trust, so they will be strongly trustworthy (i.e. change of institutional culture), and by providing non-monetary incentives (the correct choice of incentive will depend on exactly what their non-selfish motivation is). Knaves need sanctions, which can make them weakly trustworthy. However, this is a delicate balance because sanctions can crowd out normative frames. We can also increase the trustworthiness of financiers by making finance less attractive to knaves; changing the mix of types in finance could help support the necessary cultural change

Team Reasoning: Theory and Evidence

The chapter reviews recent theoretical and empirical developments concerning the theory of team reasoning in game theoretic interactions

Framing as Path-Dependence

A “framing” effect occurs when an agent’s choices are not invariant under changes in the way a choice problem is formulated, e.g. changes in the way the options are described (violation of description invariance) or in the way preferences are elicited (violation of procedure invariance). In this paper we examine precisely which classical conditions of rationality it is whose non-satisfaction may lead to framing effects. We show that (under certain conditions), if (and only if) an agent's initial dispositions on a set of propositions are “implicitly inconsistent”, her decisions may be “path-dependent”, i.e. dependent on the order in which the propositions are considered. We suggest that different ways of framing a choice problem may induce the order in which relevant propositions are considered and hence affect the decision made. This theoretical explanation suggests some observations about human psychology which are consistent with those made by psychologists and provides a unified framework for explaining violations of description and procedure invariance.framing, preference reversal, path-dependence, rationality, deductive closure

The Outlandish, the Realistic, and the Real: Contextual Manipulation and Agent Role Effects in Trolley Problems

Hypothetical trolley problems are widely used to elicit moral intuitions, which are employed in the development of moral theory and the psychological study of moral judgments. The scenarios used are outlandish, and some philosophers and psychologists have questioned whether the judgments made in such unrealistic and unfamiliar scenarios are a reliable basis for theory-building. We present two experiments that investigate whether differences in moral judgment due to the role of the agent, previously found in a standard trolley scenario, persist when the structure of the problem is transplanted to a more familiar context. Our first experiment compares judgments in hypothetical scenarios; our second experiment operationalizes some of those scenarios in the laboratory, allowing us to observe judgments about decisions that are really being made. In the hypothetical experiment, we found that the role effect reversed in our more familiar context, both in judgments about what the actor ought to do and in judgments about the moral rightness of the action. However, in our laboratory experiment, the effects reversed back or disappeared. Among judgments of what the actor ought to do, we found the same role effect as in the standard hypothetical trolley scenario, but the effect of role on moral judgments disappeared

Cultural differences in responses to real-life and hypothetical trolley problems

Trolley problems have been used in the development of moral theory and the psychological study of moral judgments and behavior. Most of this research has focused on people from the West, with implicit assumptions that moral intuitions should generalize and that moral psychology is universal. However, cultural differences may be associated with differences in moral judgments and behavior. We operationalized a trolley problem in the laboratory, with economic incentives and real-life consequences, and compared British and Chinese samples on moral behavior and judgment. We found that Chinese participants were less willing to sacrifice one person to save five others, and less likely to consider such an action to be right. In a second study using three scenarios, including the standard scenario where lives are threatened by an on-coming train, fewer Chinese than British participants were willing to take action and sacrifice one to save five, and this cultural difference was more pronounced when the consequences were less severe than death

Team Reasoning, Framing and Self-Control: An Aristotelian Account

Decision theory explains weakness of will as the result of a conflict of incentives between different transient agents. In this framework, self-control can only be achieved by the I-now altering the incentives or choice-sets of future selves. There is no role for an extended agency over time. However, it is possible to extend game theory to allow multiple levels of agency. At the inter-personal level, theories of team reasoning allow teams to be agents, as well as individuals. I apply team reasoning at the intra-personal level, taking the self as a team of transient agents over time. This allows agents to ask, not just “what should I-now do?’, but also ‘What should I, the person over time do?’, which may enable agents to achieve self-control. The resulting account is Aristotelian in flavour, as it involves reasoning schemata and perception, and it is compatible with some of the psychological findings about self-control