Reputation, a universal currency for human social interactions

Abstract

Decision rules of reciprocity include ‘I help those who helped me’ (direct reciprocity) and ‘I help those who have helped others’ (indirect reciprocity), i.e. I help those who have a reputation to care for others. A person's reputation is a score that members of a social group update whenever they see the person interacting or hear at best multiple gossip about the person's social interactions. Reputation is the current standing the person has gained from previous investments or refusal of investments in helping others. Is he a good guy, can I trust him or should I better avoid him as a social partner? A good reputation pays off by attracting help from others, even from strangers or members from another group, if the recipient's reputation is known. Any costly investment in others, i.e. direct help, donations to charity, investment in averting climate change, etc. increases a person's reputation. I shall argue and illustrate with examples that a person's known reputation functions like money that can be used whenever the person needs help. Whenever possible I will present tests of predictions of evolutionary theory, i.e. fitness maximizing strategies, mostly by economic experiments with humans.