Monday, May 14, 2012

The Biology of Trust - a biological basis for free market economics

Ever wonder why some people are trusting and generous, others not so much? It may have to do with a molecule that is normally released in people during sex or breast feeding. The molecule is oxytocin, and it might help explain trust in an economic sense.
Paul Zak is a neuroeconomist, interested in finding the biological foundations for human behaviour. Since human behaviour (Mises called it human action - praxeology) is essential in economics, well, you can see why this is interesting work.

Zak says his work builds on work done by Vernon Smith, also an interesting guy. Check out this interview of Smith on ReasonTV last year. That Smith has based much of his work on another Smith, Adam Smith.
Here is Paul Zak explaining his very interesting experiment, and how it might help understanding economics.

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