Why trust is so important and how we can get more of it? | Dan Ariely | TEDxJaffa

[Music] so first a word about my half beard so I went on a month-long hike on the Israel trail and decide not to shave that's half of the story and then I I was burned many years ago I don't have hair on the right side of my face so that's the other half I'm not trying to make a fashion statement okay so I want to talk about trust I want to talk about the importance of trust to society why is it so important and how do we get more of it now if you think historically we had lots of ways to increase trust in society we had things like a handshake a handshake is actually showing somebody you don't have a weapon right if you come to somebody and you hand is out there in the open they know you not you don't have a weapon they also clinging glasses saying the hind is also a question of trust the the story is that people use to mix the liquid between the two glasses maybe you're trying to poison me let's make sure that the liquid is spread between the two glasses this way I'll know there's not trust now that's not real trust by the way but but still trust now trust I will try to argue this is a common good it's everywhere and it's incredible lubricant for society so let's think for a second about what happens when we don't have trust so I was recently in a country in South America and I went to buy a pen and I went to the counter I saw a pen I liked I pointed to it they person wrote me a little note I took that note and I went to a cashier I paid the cashier that amount of money and I got another note I went to a third person I gave him the second note and he gave me the pen now why do they need three people to sell a $15 pen because they don't trust anybody right the person who runs this Renda store did not want anybody to hold the pen and the money at the same time so they created this incredible elaborate process because there was no trust and if you think about your own your own lives think about the role trust plays what happens in society without without trust you have to have a contract for everything everything is complex you don't trust anybody everything is incredibly difficult by the way one of the most bizarre things about trust have it ever happen to you that you're in the airport and you to go to the bathroom and you say to somebody would you watch my bag I'm going to this we study that actually so first of all it's amazing if you think about it because what you're really telling that person is if you're thinking about stealing my bag now is the right time but we actually asked asked the question and it turns out that the person who said yes I'll watch your bag actually feels committed to their promise right it's just an empty promise to somebody you'll never meet again but people still stick to it so try it out okay so Trust is incredibly important now to think about trust I want to tell you about a game we call the public goods game the public goods game and here's how the game works I'll give you one version of it okay in this version we have ten people ten people every morning that they wake up they get $10 each every morning they wake up to get $10 and they could decide what to do with that money they could put as much of it as they want in the public pool and they can keep as much as they want to themselves by the way this is anonymous game nobody sees anybody else people just put money into the public pool now the money in the public pool grows five times and then in the evening it's equally divided by everybody right so what happens when you play this game life looks good people wake up they get $10 everybody puts their money in ten people $10 $100 by the evening the money is multiplied five times everybody gets $50 life is good this is what it is to live in a good society you're contributing something to the public good the public good increases in value everybody benefits and people are happy okay and then one day this goes on for a while then one day one person puts zero and you probably all can think who who that person would be in from the people you know okay so what happens what happens when one person puts nothing nine people ninety dollars multiply five times four hundred fifty in the evening everybody gets forty five dollars right so you notice and one person has fifty five dollars right the person who betrayed the public good has their ten dollars but because the money is equally divided they get their x-default $45 plus their own ten that person betrayed the public good and benefited but here's the question what happens the next day nobody puts anything now in economics we think about this game as a game with two equilibria okay what does it mean that it has two equilibria there's one equilibria that everybody participates and then there's not really where that nobody participates the situation in which 50 percent of the people participate in 50 not is not a stable situation so that's one everybody contributes and nobody contribute these are the only two equilibria but the other thing to realize is that the good equilibria where everybody participates is incredibly weak it's enough for one person to betray the public good and the whole thing deteriorates the solution in which nobody participates it's incredibly strong equilibrium if two people all of a sudden start contributing nothing changes people don't move and that's actually a good analogy for society in general Trust is an incredibly important public good when we live in a society that we can trust people life is really wonderful but when some people betrayed the public good things deteriorate and then it's very hard to change the situation so the point is the trust is a public good we're all much much better off when we have trust the problem is the trust can deteriorate over just imagine that you lived in the country where some of your public officials behave you the less than perfect way right what does it what happens to the public trust or just imagine that you go somewhere and somebody says do you want to pay v8 imam or not right what happens to our understanding of what's acceptable in society okay so now that we know the trust is important it's a public code we can ask the question of how do we increase trust what can we do to increase trust and here's a couple of ways to think about it the first game I'll describe to you is a game I'm sure you all know called the prisoner's dilemma game and just to repeat here's the game the police catches you and one of your best friends they catch you they suspect that you've you've been a part of a criminal activity and they put you in two separate room and they start interrogating you and basically your question is in this in this case do you cooperate in this case it means you're silent you cooperate with your friend not with the police or do you defect do you rat on your friends and give them up right that's your dilemma stay loyal to your friend give them up and and there's a payoff matrix we'll go at it if if both people are silent right then each of you will get one year in prison you don't say anything the other person don't say anything the police has very weak evidence you'll be a year in prison but but imagine you're the red person and you ask yourself what what will the other person do you ask yourself what would the blue person do and you say well right now if I remain silent and the blue person is silent we each get one year but the blue person could benefit if they decide to rat and then I will get twenty years so what should I do I should rat as well so basically you have the dilemma if you trust the other person you would both remain silent and both of you would benefit justice of course will not benefit but you know you too would benefit but the problem is if you don't trust the other person then you would both rat and everything would be worse for the two of you now you sit there and you make a decision and you can't talk to your friend now here is the particular game I want to describe to you in this game some people play it in what is called the stranger condition they played with one person then another one then another one that not every game was a new game as if you met a new person every time and in the second condition you played with one person ten straight games now if you play ten straight games you have a chance to do what to build reputation the other person sees you they know you they know how to react the next time you have an opportunity to create reputation what happens well when you look at what happened in terms of what people choice in this stranger condition most people rat what do you think happened in the game where people have a chance to create reputation most people cooperated most people trusted their friend it's actually slightly more interesting than that because if you look what happened over time it looks as if there are two periods in the first period the people in the partner game were much better this stranger because there was still building reputation and there was an opportunity to enjoy the reputation but if you look at the end of the game at the end of the game there's no more value for reputation the game is ending and therefore people defected so if you only look at the first part of the game where there was real value for reputation people behaved much nicer so so what is the what is the lesson here the lesson is that when we think long term when we have some value from long term social interaction we behave much better of course you can think about something like eBay what is eBay doing with its reputational system it's taking people who are interacting with each other in this stranger condition and say let's create reputation a reputation system that will basically put all of those together as if there's some residue to your interaction between one person to another okay so long-term relationship and reputation helps to increase there's another way to increase trust and that I'll describe with something called the trust game and here's how the trust game works two people play a 1 player 2 both of them in separate rooms they don't know each other they'll never meet each other and you can't to play a 1 and you say hey player 1 here's $100 and now you can do two things with this hundred dollars you could decide to give it to the blue player and if you give it to the blue player the money will quadruple it will come from $100 it will become four hundred dollars or you can keep the money to yourself now ask yourself what should I do how much would you sell should you send anything should you send nothing what should you do well in this game what you should do is put yourself in the shoes of the other person and you ask yourself if I would send them the money will dice send it back and if you think the other person will send you back the money of course you'll send it and if you think they'll take the money and go home you'll not send them the money right now just to be clear the economic prediction the standard rational economic prediction is that the other person would never send you money back why would they they would be better off to just take the money and go and go home and if you believe in perfect rationality you would think they will take the money and go home so let me not trust them in the beginning so and so what happens what actually happens is that people do send the money and people do reciprocate okay so so good news we are better than economic theory predicts we're more trusting and more reciprocating as a side comment I should say that we we often use the term irrational in a negative sense that people are bad in some in some way and it's true in many cases but in this particular case in the case in which were more trusting and more reciprocating the stand economic theory predicts it's actually a good thing right you would not want to eliminate like if you could redesign you in beings you would not eliminate trust in reciprocation you might actually want to increase it okay so people are trusting people are reciprocating good news but not always not always sometimes the red player sends the money and the blue player goes home and here's how things become slightly slightly more interesting this is where punishment and revenge come in so imagine that you're they a red player and you send your hundred dollars to the blue player and the money quadrupled and then the blue player took all the money and went home and then I came to you and I say listen you just trusted that person you send them a hundred dollars they decide to take the money and go home but I'll tell you what if you will give me Dan money I will go and I will hunt the blue player for you and I will take some of their money if you give me one dollar I'll hunt them down and take two dollars away from them you'll give me fifty I'll hunt them for 100 now just to be clear you're not making any money out of this deal you just lost a hundred dollars now you can lose more but with the benefit of getting the other person to lose even more now how many of you would go ahead and spend that money put yourself in that mindset you just spend a hundred dollars that person got $400 they went home I give you this offer to go into your checking account spend more money to make that other person suffer how many of you would take revenge okay about a third a little bit more and how many of you ever got divorced now now you can get the feeling right of what people because because because the truth is that it's very hard to sit here and feel how offended we would be when somebody betrayed our trust but when somebody betrays our trust we would go to unbelievable extents to get them to suffer now now the thing is that revenge has kind of a social logic to it and and here is how the logic works so imagine that you and I were on a desert island and I had the mango and you wanted my mango if you thought I was perfectly rational you would say let me steal Dan's mango I'll run away he would not find me he would go and get a new mango but if you thought that I was revengeful that I would not sleep and I will not rest I will not eat I will not drink until I find you my mango and maybe take a banana from you you would not take my mango to start with now if you think about it in that regard imagine one of you would act negatively toward somebody else in the audience but you knew that if you do it everybody will be offended by that and everybody will jump on you that in a way is the version of the police and the justice system that is coded is part of our moral code right the outrage that we feel and our willingness to take revenge is actually an old version of the police and the judicial system at once we would punish somebody for for offending us so what happened yes do people take revenge absolutely and even more interestingly when people execute and plan revenge their brain shows similar activity to pleasure I'm not recommending it but just so you know there is something like project click ok and and finally I would also say something about revenge in some sense if you think about revenge in this game it's altruism why altruism is something that we do selfishly in this case you would teach this bastard a lesson like you would never get to benefit from that again you'll never meet and you don't know who they are but you will go into your checking account you would spend money to teach that person a lesson so they interact better with other people down the line so so how can we increase trust long-term relationship reputation and even revenge I'll end with two more tricks for trust economists by the way I always puzzled by why people leave tips especially in restaurants and cities that people don't intend to go why would you ever leave a tip but what we do and we leave tips in very similar magnitude to restaurants we intend to go back to but in this particular study imagine a waiter comes to you there are four people in the table they can't wait to come to the first person and the first person says I want to fish and the person says now don't take the fish it's too expensive and not so good take the chicken and then what happens to the waiters recommendation to everybody else they accept all the recommendations why because the way to show that they're willing to sacrifice their personal utility I told take something cheaper demonstrating that we have aligned interest right now what would happen if the waiter somebody says I want the fish and the way that chemist said ah don't take the fish take the lobster it's twice as much and it's a little bit better how much would everybody else would trust them not that much the point is that basically showing that we have the other person interest in mind and we're willing to sacrifice some of our own utility for that is a trust creating exercise and they'll tell you one last piece of personal advice on increasing trust so I told you I went hiking on the Israel trail it was a great great month and during that month I invited some people I knew and some people I didn't know to join me me and Ron my friend for a day or two along the road and we had three rules for the trail no phones from 7:00 to 7:00 everything that he said on the trail stays on the trail very important rule and and then everybody introduces themselves with an embarrassing story and and I learned that telling embarrassing stories is the wonderful way to create trust so I'm going to recommend that you try it this evening and to get you started I'll tell you one of my embarrassing stories well I had the month I it's amazing you discover you have so many stories like they just keep on coming so so this particular story this was about about two years after I got injured and there was a woman in rehabilitation with me called CP and she decided that I needed to go on a date and she said that she had a friend that might be willing to date me okay great so and she took me to that date we met me CP and her friend we met somewhere on the beach to have ice cream we get ice cream we we set it around sunset and this woman for some reason asked me a question about hospital it's it's a good topic but she asked me a question about something about hospital I don't know exactly what she asked but I went into a tirade about a nurse I hated and this was this was a terrible nurse it was it was just awful I hated everything about I would I would try to organize my day to avoid his shift I would try to get operate on Fridays if I knew that he was on shift on the week I hated that you can hear I hated that person with passion it was like my day was organized around escaping how evil he was anyway I didn't talk about him for two years in office and she asked this pool and she asked me something and I just go I just go and go and go and I keep on this hate and anger and terrible terrible term and I keep on going I I think for 15 minutes 5th just go and go and go and go and they finish and I feel such relief like you know I really I didn't talk him for a long time finally I get a chance just goes out and and she says and what's-his-name so I say his name and she stands up as you say it's my father and I've never seen her since so I'm not recommending all embarrassing stories but it's a trust creating activity Trust is important try tonight and thank you very much [Applause]

Channel: TEDx Talks

Views: 88,721

Rating: 4.9100747 out of 5

Keywords: TEDxTalks, English, Social Science, Behavorial economics, Psychology, Research, Social Interaction, Society

Id: WHyApqVjddQ

Length: 22min 57sec (1377 seconds)

Published: Fri Oct 20 2017