Cindy W. 2023 | BASIS Independent Silicon Valley
- Project Title: Generosity and Vulnerability in Conditional Cooperation
- Basis Independent Advisor: Dr. Zoey Wang
- Internship Location: Carnegie Mellon University
- Onsite Mentor: Dr. Russell Golman
Standard economic theory assumes that all agents are rational, acting in their own best interest. Yet, we often find real-life decisions to be far from rational as they are affected by our emotions and environment. Specifically, I am focusing on the factor of vulnerability through a virtual project with Carnegie Mellon University’s Social & Decision Sciences Department. Vulnerability has often been studied in psychology as a facilitator of trust and intimacy. Considering this, I am researching whether vulnerability can also induce trust in an economics setting through reciprocity, generosity, and cooperation. By creating my own economic game and distributing it through Prolific, an online site for completing surveys and conducting research, I am gathering a sample of subjects to participate in my study. In my game, there is a clear Nash equilibrium; however, due to the effects of vulnerability, some subjects may not choose the most rational choice for themselves. Instead, they may be more inclined to give to other people. I expect that vulnerability can induce connections between humans, which is extremely pertinent in real-life interactions, specifically in business through sales and marketing. The results of my research add an additional explanation for why real-life human behavior is not the same as that predicted by economic models, and more importantly, it may advise us on sales and marketing strategies that can induce customers to give back more to the business.