Nov222010

Building Trust: Neuroeconomist Wants to Know How It’s Done

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By Colleen Kearney Rich

Kevin McCabe. Creative Services photo

Kevin McCabe. Creative Services photo

For Mason neuroeconomist Kevin McCabe, economics is a matter of trust. Trust, or what he sometimes calls the trust paradigm, has been at the root of his economic experiments for the last decade.

Director of the Center for the Study of Neuroeconomics, McCabe came to Mason in 2001 from the University of Arizona as part of Nobel laureate Vernon Smith’s research group.

It was at Arizona that the first trust experiments and the idea of neuroeconomics began.

“We were looking at individual behavior and realized there wasn’t a really good [scientific] model for it,” he says. Research led McCabe and his colleagues to the fields of evolutionary and cognitive psychology, then, finally, to cognitive and social neuroscience.

“In exploring, we realized that there was this whole new field that was just starting to get at the biological foundations of human cognition,” says McCabe, who holds a joint appointment with the Krasnow Institute for Advanced Study and the School of Law.

“It became obvious that, if we were going to build a scientific model of the economic behavior of individuals, it would need to be based on the same biological model that neuroscientists were exploring.”

And the field of neuroeconomics was born.

A computer lab where subjects participate in economics experiments. Creative Services photo

McCabe established the Center for the Study of Neuroeconomics in 2005. His group maintains a laboratory at Krasnow and shares a prospective pool of almost 1,000 research subjects with the Interdisciplinary Center for Economic Science, where he is also on the faculty. Almost 90 percent of the research subjects are Mason undergraduates, and the research groups are always adding to the pool.

His laboratory consists mostly of study carrels and computer monitors. The research subjects interact in a virtual environment using avatars. Anonymity is maintained for a reason.

“We keep it anonymous so people don’t make side judgments outside of the incentives in the experiment,” he says.

What are the incentives for these experiments? Money, of course. At its most basic level, a research subject in these experiments can “earn” more money if he or she is willing to trust the other subject.

“We were very interested in how trust relationships are formed, how they are maintained and what happens when they are broken,” says McCabe, who is also a research fellow at the International Foundation for Research in Experimental Economics and the Gruter Institute for Law and Behavioral Research.

McCabe’s group also conducts similar trust experiments using the functional magnetic resonance imaging (fMRI) scanner housed at Krasnow to see activity in the subject’s brain as they make choices.

“We think this is the kind of social dilemma people face in their lives all the time,” he says.

McCabe has been publishing research about the trust paradigm since 1995, but trust is only one of the areas in the “economics of exchange” that McCabe has been working in.

Over the course of his career, he has written or cowritten more than 50 articles covering topics as diverse as market design and game theory to monetary theory and behavioral economics.

“We want to understand how people behave not just in trust relationships, but in strategic relationships and noncooperative relationships, as well,” he says.

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