Reputation, a universal currency for human social interactions

Abstract

Decision rules of reciprocity include 'I help those who helped me' (direct reciprocity) and 'I help those who have helped others' (indirect reciprocity), i.e. I help those who have a reputation to care for others. A person's reputation is a score that members of a social group update whenever they see the person interacting or hear at best multiple gossip about the person's social interactions. Reputation is the current standing the person has gained from previous investments or refusal of investments in helping others. Is he a good guy, can I trust him or should I better avoid him as a social partner? A good reputation pays off by attracting help from others, even from strangers or members from another group, if the recipient's reputation is known. Any costly investment in others, i.e. direct help, donations to charity, investment in averting climate change, etc. increases a person's reputation. I shall argue and illustrate with examples that a person's known reputation functions like money that can be used whenever the person needs help. Whenever possible I will present tests of predictions of evolutionary theory, i.e. fitness maximizing strategies, mostly by economic experiments with humans.

Keywords: gossip; indirect reciprocity; reputation; social dilemma; updating rule.

Figure 1.

Green columns show the average image score of all the receivers who received money and red columns show the average image score of all the receivers who did not receive anything in each of the eight groups. Data are shown as deviations from the means per group and round to correct for group and round effects (adapted from [34]).

Figure 2.

Strategies for reputation dynamics, image scoring and standing. Mean (+s.e.) probabilities of donors of NO-players receiving NO per round (during 16 rounds) of 12 groups with much information and 11 groups with little information of six subjects plus one NO-player each. (a) Expectation for image scoring: measured probabilities (filled bars) are compared with expected probabilities (grey bars). (b) Expectation for standing. The black bars are the same in (a) and (b) showing measured behaviour. The grey bars show the average values calculated for the respective decisions assuming (a) image scoring and (b) standing (adapted from [36]).

Figure 3.

Percentage of cooperation (‘yes’) per group of six subjects in each round of the public goods game (filled symbols) and in each round of the indirect reciprocity game (open symbols). In one treatment, the groups alternated between rounds of indirect reciprocity and rounds of public goods game until round 16 (blue); in the other treatment, groups started with eight consecutive rounds of the public goods game and continued with eight rounds of the indirect reciprocity game (red); in rounds 17–20, groups of both treatments played the public goods game, which was either announced (squares) or not announced (diamonds) (adapted from [69]).

Figure 4.

For the public goods (PG) rounds (circles) and indirect reciprocity (IR) rounds (squares), the group mean ‘yes’ per round for both treatments are shown. In treatment 1 (black), the groups played PG rounds, from round 11 to round 20 with their transferable name (T) (filled symbols) and from round 21 to 25 with their non-transferable name (NT) (open symbols). In treatment 2 (grey), the groups played PG rounds, from round 11 to round 20 with their non-transferable name and from round 21 to 25 with their transferable name. The period from round 1 to 10 was identical in both treatments (three PG rounds played with the non-transferable name, two IR rounds with the transferable name, three PG rounds with the transferable name and two IR rounds with the transferable name) (adapted from [39]).

Figure 5.

Group composition in public goods (PG) and indirect reciprocity (IR) rounds in each of six IR-rounds and in each of six PG-rounds. The cut-off of the figure in the second PG-round indicates that this sequence is continued. See §8 for details.

Figure 6.

Money (€) per group of six subjects invested in a climate pool in each round of the non-anonymous (filled) and anonymous (open) climate public goods game. In one treatment (well-informed), the groups received additional expert information about the state of the global climate (red); in the other treatment (little-informed), the groups received no additional information (blue) (adapted from [85]).

Figure 7.

Sum of allocated sanctioning points in the treatments ‘punishment, PUN’ and ‘punishment and indirect reciprocity, PUN&IR’ in each of 20 periods (adapted from [86]).