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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
I knew I would find The Traitors, a televised version of the party game Mafia, about as relaxing as waiting in accident and emergency with an open head wound. But the show has become a smash hit in both America and Britain, and Fomo forced me to tune in. Offsetting my anxiety was the realisation that the game had three economic lessons, each backed up by research.
For those of you who did not suffer through this particular game as a youth, the premise is that so-called “faithfuls” try to work out who has been assigned the status of “traitor” so they can win a cash prize. The scenario is relatable enough — what organisation hasn’t struggled to work out whose underperformance is holding them back? The TV version simply involves more cloaks.
The first lesson is that the whole thing is a colossal waste of time. A game free of deceit could free everyone’s energy for something more constructive. In the real world, mistrust comes with economic costs. It can force expensive monitoring of employees, or else excruciatingly lengthy contracts specifying break clauses or non-compete agreements. And it can kill what might have been fruitful relationships.
In the 2000s a wave of studies showed correlations between survey-based measures of trust and things such as higher gross domestic product per person, more GDP growth and a bigger stock market. Such mega-regression analysis has since fallen out of fashion, partly because vague survey questions made it tricky to work out what they were capturing. Still, a review from 2014 concluded that trust played a central role in economic development.
My second takeaway from The Traitors is that the zero-sum thinking forced upon the contestants is connected to the atmosphere of distrust. Stefanie Stantcheva of Harvard University explains that people who tend to have a zero-sum outlook in real life also tend to distrust groups of which they are not part. In certain settings, such as in debates about immigration, trust in some groups could come at the expense of others.
Admittedly, a version of The Traitors where everyone shared an objective would be dull. But I’m a columnist, not a TV executive.
The third lesson stems from the recent UK finale. Contestant Mollie Pearce warned Harry Clark that if he betrayed her, she would never speak to him again. (For the game theorists among you, she was trying to turn a one-shot game into a repeated game, and use the threat of future punishment to sustain co-operation.) Set against a prize fund of more than £95,000, it was never going to work.
Pearce lost. One viral comment on the social media platform X noted that she learnt the “never trust a pretty boy” lesson in front of millions, whereas most of us got there at a school disco with an audience of nearer 30.
The takeaway is that although higher trust seems to support growth at a macroeconomic level, for individuals there is such a thing as too much. That shouldn’t really be a surprise. Recent experiences with cryptocurrencies and non-fungible tokens confirm that there are others who seem to have missed out on a formative disco experience.
What is more surprising is that surveys seem to pick up the trust level at which income is maximised. A study published in 2016 used a survey of Europeans that asked how much they trusted others on a scale of zero to 10, and plotted that with their household income, adjusting for other factors. Starting at zero, both trust and income rose together. But at around a self-reported trust level of seven, income peaked. A trust level of 10 is associated with income 7 per cent below that.
The authors backed up the finding with experimental results showing that very trusting people were more likely to make mistakes, lowering their income. There is a balance to be struck, however: being too mistrustful lost them more. A later study published in 2023 added more data to argue that the result was not a fluke, and found that about a fifth of people tended to trust beyond their income-maximising amount.
That 2023 study contained a final result, which should comfort anyone who identified with Pearce. (As a solid member of that group, I prefer the label “super-truster” to “patsy”.) Very trusting people may be less likely to earn the megabucks than their (slightly) more suspicious peers, but they do seem to be happier.
Going from a seven to a 10 on the trust scale is associated with household income around 10 per cent lower, but also with a bump to wellbeing roughly similar to the premium associated with marriage. I’ll take it.