The introduction of money into small groups decreases how often people will do favors for free, while in large groups, money increases trust and cooperation, according to research by Chapman University economic professor Gabriele Camera.
The promise of compensation improves exchanges of service within large groups, while negatively impacting voluntary offers of help for no cost – in this case, the cost of a token in a game used in the study.
Groups of two were allowed to identify with each other before the game, building interpersonal trust. At groups of four and above, all communication between participants existed within the game, representing an impersonal societal structure, a city.
Players were given a chance to “help” each other. First the interaction was trust-based, then it focused on exchange of a favor for a game token “fee.” In the small groups, the players grew to see each other in a positive light, said Camera. The groups of a larger size did not know each other and had no opportunity to evolve a sense of who they were interacting with.
In the smallest groups, with two participants, favors for no compensation were frequent.
Trust and cooperation to help and give favors began to break down in groups of four and became even more infrequent when eight participants interacted.
As the group size jumped from four to eight, Camera said he saw the giving and “community-minded” ethos of the groups break down the most. Participants withheld favors from others more often after this group size jump.
With the token introduction, the option of voluntarily performing a favor for another participant free of cost became scarcer in all group sizes – participants had the promise of compensation for a favor.
With 32 participants, representative of a large, complex society, there was no trust, as no bonds were formed, and voluntary helpful behavior did not occur. Camera said that in real life this lack of trust and willingness to do favors for unknown people is common.
When using tokens as arbitrary units for exchange, as money representation, cooperation to perform compensated help in larger groups was more frequent.
“The idea is that in small groups these people are more or less involved in helping each other,” said Camera. “Large groups, people lost track – others could not be trusted to help each other.”
Institutions in society, such as the promise of monetary exchange for a service, help us overcome a lack of trust, said Camera. The essence of money and the monetary system is based on the trust of the exchange because of a perception of having something of value. That value item becomes a higher focus in society than helping.
“We tend to give in exchange what we feel the other person wants,” said Camera.
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