Paul Seabright | New Research

Honest signalling in trust interactions: smiles rated as genuine induce trust and signal higher earnings opportunities

This paper by Samuele Centorrino, Elodie Djemai, Astrid Hopfensitz,Manfred Milinski and me has now appeared in Evolution and Human Behavior.

The link is here:

Abstract:

We test the hypothesis that smiles perceived as honest serve as a signal that has evolved to induce cooperation in situations requiring mutual trust. Potential trustees (84 participants from Toulouse, France) made two video clips averaging around 15seconds for viewing by potential senders before the latter decided whether to ‘send’ or ‘keep’ a lower stake (4 euro) or higher stake (8 euro). Senders (198 participants from Lyon, France) made trust decisions with respect to the recorded clips. If money was sent to the trustee, stakes were tripled and trustees could decide to keep all, two thirds or one half of the tripled stakes. Clips were further rated concerning the genuineness of the displayed smiles. We observe that smiles rated as more genuine strongly predict judgments about the trustworthiness of trustees, and willingness to send them money. We observe a relation between costs and benefits: smiles from trustees playing for higher stakes are rated as significantly more genuine. Finally, we show that those rated as smiling genuinely return more money on average to senders. An increase of one standard deviation in rating of smile genuineness is associated with an unconditional expected gain of about one dollar and thirty cents to senders in the two trials of the experiment. Potential gains for senders could be significantly increased from taking smiles rated as genuine into account.

Our theoretical paper, entitled “A Model of Smiling as a Costly SIgnal of Cooperation Opportunities”, has now been published, in Adaptive Human Behavior and Physiology, and is available here. Here is the abstract:

We develop a theoretical model under which “genuine” or “convincing” smiling is a costly signal that has evolved to induce cooperation in situations requiring mutual trust. Prior to a trust interaction involving a decision by a sender to send money to a recipient, the recipient can emit a signal to induce the sender to trust them. The signal takes the form of a smile that may be perceived as more or less convincing, and that can be made more convincing with the investment of greater effort. Individuals differ in their degree of altruism and in their tendency to display reciprocity. The model generates three testable predictions. First, the perceived quality of the recipient’s smile is increasing in the size of the stake. Secondly, the amount sent by the sender is increasing in the perceived quality of the recipient’s smile. Thirdly, the expected gain to senders from sending money to the recipient is increasing in the perceived quality of the recipient’s smile.

How Does Ranking Affect User Choice in Online Search?

This paper from Mark Glick, Greg Richards, Margarita Sapozhnikov and me is now published in Review of Industrial Organization, and is available under Open Access here.

Here is the abstract:

This paper investigates whether a search engine’s ordering of algorithmic results has an important effect on website traffic. A website’s ranking on a search engine results page is positively correlated with the clicks that it receives. This could result from the search engine’s accurately predicting the websites relevance to users. Or it could result from users merely clicking on the highest ranked links, regardless of the website’s relevance. Using a unique dataset, we find that a website’s rank, not just its relevance, strongly and significantly affects the likelihood of a click. We also find evidence that rank influences CTRs partly by controlling access to the scarce attention of users, but primarily by substituting the reputational capital of the search engine for the reputation of individual websites.

Cooperation Against Theft

At last, my paper with Wided Mattoussi has appeared in The American Journal of Agricultural Economics; the reference is Am. J. Agr. Econ. (2014) 96 (1): 124-153. doi: 10.1093/ajae/aat083

The published paper (gated) is available here and the final manuscript is available here.

“Soviet Power Plus Electrification: what is the long-run legacy of communism?”

“Soviet Power Plus Electrification: what is the long-run legacy of communism?” (with Wendy Carlin and Mark Schaffer), available here, published in Explorations in Economic History 2012. http://dx.doi.org/10.1016/j.eeh.2012.07.003

Abstract

Two decades after the end of central planning, we investigate the extent to which the advantages bequeathed by planning in terms of high investment in physical infrastructure and human capital compensated for the costs in allocative inefficiency and weak incentives for innovation. We assemble and analyse three separate types of evidence. First, we find that countries that were initially relatively poor prior to planning benefited more, as measured by long-run GDP per capita levels, from infrastructure and human capital than they suffered from weak market incentives. For initially relatively rich countries the opposite is true. Second, using various measures of physical stocks of infrastructure and human capital we show that at the end of planning, formerly planned countries had substantially different endowments from their contemporaneous market economy counterparts. However, these differences were much more important for poor than for rich countries. Finally, we use firm-level data to measure the cost of a wide range of constraints on firm performance, and we show that after more than a decade of transition in 2002-05, poor ex-planned economies differ much more from their market counterparts, in respect to both good and bad aspects of the planning legacy, than do relatively rich ones. However, the persistent beneficial legacy effects disappeared under the pressure of strong growth in the formerly planned economies in the run-up to the global financial crisis.

New Research

Find below a list of the research I am currently completing or that has been recently published.

“Migration and the Equilibrium Prevalence of Infectious Diseases”, working paper with Alice Mesnard, available here.

“How Does Ranking Affect User Choice in Online Search?”, working paper with Mark Glick, Greg Richards and Margarita Sapozhnikov, available here.

“Cooperation Against Theft: A Test of Incentives for Water Management in Tunisia” (with Wided Mattoussi), forthcoming in American Journal of Agricultural Economics 2013. Available here.

Scott Morton, Fiona and Seabright, Paul, 2013 “Research into biomarkers: how does drug procurement affect the design of clinical trials?” Health Management, Policy and Innovation 1(3): 1-15. Available here.

Professional Networks and their Coevolution with Executives’ Careers: Evidence from Europe and the US (with Nicoletta Berardi). Working paper, available here. Figure 1 above, drawn from that paper, shows how executives with larger networks are more likely to move between firms.

“Soviet Power Plus Electrification: what is the long-run legacy of communism?” (with Wendy Carlin and Mark Schaffer). Available here, published in Explorations in Economic History 2012. http://dx.doi.org/10.1016/j.eeh.2012.07.003

“The Three Musketeers: What Do We Still Need to Know About our Passage through Prehistory?”, Biological Theory, 2012, doi: 10.1007/s13752-012-0017-7 Available at SpringerLink OR [Download PDF of proof copy] [ Download PDF of related article by Sterelny ]

“The Birth of Hierarchy”, in Calcott et al (2013 forthcoming): Cooperation and its Evolution, MIT Press. PDF available here.

“The Old Boy Network: Gender Differences in the Impact of Social Networks on Remuneration in Top Executive Jobs”, IDEI Working Paper, no. 689, octobre 2011 (with Marie Lalanne), revised September 2012.