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How do people attribute responsibility when an outcome is not caused by an individual but results from a decision chain involving several people? We study this question in an experiment, in which five voters sequentially decide on how to distribute money between them and five recipients. The recipients can reward or punish each voter, which we use as measures of responsibility attribution. In the aggregate, we find that responsibility is attributed mostly according to the voters’ choices and the pivotality of the decision, but not for being the initial voter. On the individual level, we find substantial heterogeneity with three overall patterns: Little to no responsibility attribution, pivotality-driven, and focus on choices. These patterns are similar when praising voters for good outcomes and blaming voters for bad outcomes.

Humans need social closeness to prosper. There is evidence that empathy can induce social closeness. However, it remains unclear how empathy-related social closeness is formed and how stable it is as time passes. We applied an acquisition–extinction paradigm combined with computational modeling and fMRI, to investigate the formation and stability of empathy-related social closeness. Female participants observed painful stimulation of another person with high probability (acquisition) and low probability (extinction) and rated their closeness to that person. The results of two independent studies showed increased social closeness in the acquisition block that resisted extinction in the extinction block. Providing insights into underlying mechanisms, reinforcement learning modeling revealed that the formation of social closeness is based on a learning signal (prediction error) generated from observing another’s pain, whereas maintaining social closeness is based on a learning signal generated from observing another’s pain relief. The results of a reciprocity control study indicate that this feedback recalibration is specific to learning of empathy-related social closeness. On the neural level, the recalibration of the feedback signal was associated with neural responses in anterior insula and adjacent inferior frontal gyrus and the bilateral superior temporal sulcus, temporoparietal junction. Together, these findings show that empathy-related social closeness generated in bad times, that is, empathy with the misfortune of another person, transfers to good times and thus may form one important basis for stable social relationships.

Credit default swaps (CDS) played an important role in the financial crisis of 2008 leading to calls for regulation. Here, we seek to understand the impact of a CDS regulation that restricts the possibility to hold naked CDS. We use a controlled laboratory experiment analyzing CDS pricing in a bond market subject to default risk. Our results show that the regulation achieves the goal of increasing the use of CDS for hedging purposes while reducing the use of CDS for speculation. This success does not come at the expense of lower initial public offering (IPO) prices for the bonds or worse pricing of bonds or CDS in the secondary market.

Some economic interactions are based on trust, others on monetary incentives or monitoring. In the tax compliance context, the monitoring approach creates compliance based on audits and fines (enforced compliance), in contrast to the trust-based (voluntary compliance) approach, which is based on taxpayers’ willingness to comply. Here, we examine how changes in taxation regarding platform economy revenues affect intended labor supply on such platforms. New EU legislation, effective from 2023, will mandate data sharing between platforms and tax authorities across Europe, thus resulting in increased monitoring. We investigate how this upcoming shift in monitoring power affects the intended use of platforms and how it may interact with users’ trust. We use a survey among platform workers (N = 626) in the Netherlands to examine views of the proposed regulation change, corrected for the proportion of platform income and several measures of trust. We experimentally manipulate information by either informing participants about the upcoming monitoring change or not. Results show that informing respondents about the change negatively affects expected supply of labor, and this effect is independent of respondents’ trust. We discuss the policy implications of these results.

While the effects of anxiety on various cognitive processes, including memory, attention, and learning, have been relatively well documented, the neurobiological effects of anxiety on social cognitive processes remain largely unknown. We address this gap using threat-of-shock to induce incidental anxiety while participants performed two false-belief tasks, a standard and an economic-games version. During belief formation and belief inferences, regions in a canonical social cognition network showed activation reflecting mentalizing, including the temporoparietal junction (TPJ), precuneus, and dorsomedial prefrontal cortex (dmPFC). At the same time, we found threat-related suppression of social cognition regions during belief inferences. A conjunction analysis confirmed that a network of regions was simultaneously engaged during mentalizing and suppressed by anxiety: bilateral TPJ, bilateral IFG, and putamen. We examined how threat impacted the connectivity between these seed regions and its targets. During belief formation, we found that threat suppressed the connectivity between the precuneus and two key mentalizing nodes, the dmPFC and right TPJ. Moreover, during belief inferences threat specifically suppressed belief-based connectivity between putamen and its targets in IPS and dlPFC. Dispositional distress significantly modulated threat-related suppression of connectivity between the left TPJ and left IPS. Our results indicate that social cognitive processes rely on support from other large-scale networks, such as the reward and attentional systems, and that these network interactions are disrupted under incidental and dispositional anxiety.