Researchers at the Baylor College of Medicine have developed new brain scanning software that allows them to uncover how people in business relationships develop bonds of trust -- or the kind of profound distrust that can scuttle a deal.
"There's no risk-free way to trust somebody," says P. Read Montague, director of Baylor's Human Neuroimaging Laboratory. In business deals, the problem of trust is especially weighty. How do to executives negotiating a big merger decide that they know each other well enough to get the deal done? And how does any individual learn to trust his or her financial advisor? Montague and his team performed an experiment that modeling such interactions and using a magnetic resonance imaging (MRI) machine to see what was happening in the brains of their subjects. Says Montague: "We found signals that predict what you're going to do next."
The experiments, published in tomorrow's issue of Science, revolved around what is known as a trust game, a simplified model of an economic exchange. One person, called the investor, is given $20, and told they can invest any portion of the money with a second player, the trustee. The money invested automatically triples, and the trustee decides how much money to pay back to the investor. Montague's team had its subjects repeat the exchange 10 times, allowing the investor to get a feeling of whether or not he was getting a fair deal. Because a lab at California Institute of Technology also participated in the study, the investor and the trustee were 1,500 miles apart.
Previous attempts to study how such games build a relationship have often lasted only a round or two. Alternatively, only one of the players has been in an MRI machine. "That's like having a cocktail party with one person," says Brooks King-Casas, a researcher on Montague's team. This time, both of the players were in the MRI for the whole time, so researchers could actually watch a financial relationship evolve -- and they found signals in the brain that predict whether or not people will trust each other.
Moreover, they found that increases in trust seemed to be far more powerful than decreases: Once an investor had learned to trust his trustee it was difficult to break the bond. The bottom line, says King-Casas, is that the research team was able to turn a fairly fuzzy concept like trust into something measurable.
The impact of work in this vein could be huge. Obviously, Merrill Lynch and Morgan Stanley can use all the information they can get about how financial relationships are built. Furthermore, deficiencies developing trusting relationships play an important role in several mental illnesses, including autism, personality disorders and schizophrenia. For instance, in personality disorders, patients become trusting far too quickly and lose trust equally quickly at the smallest slight.
New information about these disorders could lead to new drugs for pharmaceutical giants such as Pfizer or Bristol-Myers Squibb.
Montague sees the potential in his software, but he has decided to make it available as an open-source program, à la Linux, to ensure that academic researchers can use the program. He says that if any company wanted to develop their own version, as Red Hat did with Linux, that would be fine by him.