Research Highlights

Emotion, Reason and the Decision to Cooperate

By Alixandra Barasch, Jonathan Berman, Emma Levine, David Rand and Deborah Small

We find that people associate one's reliance on emotion with prosocial motivations and feelings such as empathy and compassion, rather than selfish emotions, such as greed.

Cooperation is essential to social life, and one of the keys to human success. Humans are able to coordinate and cooperate on a much larger scale than any other animal, allowing us to build cities, countries and multi-national corporations. But sometimes people want to cooperate with others, but are uncertain whether those others will cooperate with them, or pursue their own self-interest. According to new research by NYU Stern Professor Alixandra Barasch, when people decide whether to cooperate, they rely on cues that they pick up from others, and are especially sensitive to signals that potential partners and collaborators make their decisions in an intuitive versus calculated way.

In “Signaling Emotion and Reason in Cooperation,” Professor Barasch and her co-authors – Jonathan Berman of London Business School, Emma Levine of University of Chicago, David Rand of Yale, and Deborah Small of University of Pennsylvania – investigated, through a series of experiments using two-player prisoner dilemma games, how emotion and reason play into decisions to cooperate.

Professor Barasch and her co-authors asked three central questions to gain insight into prosocial dynamics: (1) how individuals perceive others’ motivations to cooperate; (2) whether there is a relationship between an individual’s decision mode – that is, emotional or rational – and their tendency to cooperate; and (3) how those who make decisions using emotion versus reason respond to others who signal emotion or reason.

The experiments revealed that people infer that emotional actors are more likely to be prosocial, or altruistic, than rational actors. That is, people assume that individuals who make their decisions emotionally are more likely to cooperate, and then respond accordingly by cooperating more with them.  “We find that people associate one’s reliance on emotion with prosocial motivations and feelings such as empathy and compassion, rather than selfish emotions, such as greed,” says Professor Barasch.

In addition, reaction to these signals depends on how people themselves make decisions. While people who rely on emotion themselves are quite responsive to signals of emotion and reason, people who rely on reason do not respond as strongly to these cues, instead making their decision to cooperate through calculated self-interest.  “We show that people see emotion as a signal of cooperation, and will cooperate more with individuals who make their decisions emotionally. However, signals like this are less important to people who make their own decisions using reason – they cooperate less overall, and are not responsive to these social cues.”

Building relationships is crucial for pretty much any business, so these findings have important implications for deal-makers. Companies and consumers often benefit from cooperative behavior among individuals – for example, during negotiations, business deals or even just online exchanges where there is limited information about the buyer or seller. This study highlights the importance of passion and emotion, and suggests that just being smart, or “rational,” is not enough to gain people’s trust. Communication with partners, suppliers and customers should rely on emotional engagement to build long-term, cooperative relationships. In other words, reason-based decision-making and rationally telling consumers you will create value for them is not enough – businesses have to win them over on a more emotional, human level.

The authors understand that while cooperation is crucial to consumers and businesses, it can be threatened by the relentless pursuit of self-interest and by beliefs about whether others will cooperate or pursue their own goals. Their investigation sheds light on this dynamic and provides insight into how we can encourage cooperation more broadly. If more people relied on their emotion, and displayed emotion during interactions and exchanges, it may allow for greater cooperation and better joint outcomes for business and society.