Jon Reiersen

Trust as belief or behavior

Abstract Despite its proposed importance for economic performance, there seems to be little agreement on what trust really is. In economics, trust is generally viewed as a belief regarding the action that is to be expected from others. This contrasts with the view that trust is a way of acting. In his influential book on the nature of explanation in the social sciences, Jon Elster argues that trusting is to act with few precautions. I argue that it is possible to reconcile these seemingly conflicting views about trust. I develop a simple model of trust where both beliefs and precautions play an important role – and where Elster’s understanding of trust can be viewed as a special case.

Drivers of trust and trustworthiness

Purpose The purpose of this paper is to contribute to the understanding of why people act trustworthily in anonymous non-repeated meetings where trustworthiness benefits the trustor and runs against the trustee’s material self-interest. Design/methodology/approach The paper uses a survey originally developed by Bicchieri et al. (2011). The survey makes it possible to explore whether trustworthiness has a normative element. Is there a norm of trustworthiness that inflicts punishment for disobedience? Findings The participants in the experiment strongly believe that most people will punish untrustworthy behavior, lending support to the idea that trustworthiness is norm driven. The data provide little evidence for a parallel norm of trust. Originality/value The theory of repeated games explains how trust can emerge among players in ongoing interactions. But why do people choose to trust others who they do not know in non-ongoing interactions? The results offer an explanation. When trustors are aware that trustworthiness is rooted in norms, they have reason to expect trustees to act trustworthily. Then, it makes sense to trust since trustors will benefit from their trusting.

Trust as a booster

In his book Trust. The Evolutionary Game of Mind and Society, social psychologist Toshio Yamagishi (2011) states that trust can be viewed as a “booster rocket” that provides the necessary push for the take-off from the secure ground of committed relations. This article formalizes this idea with the help of a simple game theoretic model. The article looks at a situation where networks of personalized exchange relationships provide assurance against untrustworthy behaviour but reduce the opportunity to profit from trade in larger markets. Assuming that the anonymous market contains both trust-worthy and untrustworthy types, it is demonstrated that mutual trust relations can emerge, even when there is a clear danger of opportunism and the possibility of repeated interaction is ruled out. From a more practical perspective, the model provides an insight into the role trust plays for the decision to transact in networks or markets. It is also demonstrated that networks appear as mixed blessings. Networks reduce the problems arising from incomplete contracts and behavioural risk, but they also restrict individuals’ possibility to reap potential gains produced in larger markets.

Segregation and the Evolution of Cooperation

Thirty years have passed since Robert Axelrod and William Hamilton published their influential contribution to the problem of cooperation. They showed, with the help of both an experiment and analytical techniques, that cooperation is the most likely evolutionary outcome of a Prisoner’s Dilemma game when individuals interact repeatedly. Building on Hamilton’s earlier work they also demonstrated that, when pairing of individual is not completely random, cooperating behavior can evolve in a world initially dominated by defectors. In this paper, Computer simulations are used to study the relation between non-random pairing and the maintenance of cooperative behavior under evolutionary dynamics. We conclude that cooperation can survive also when the possibility of repeated interaction and reciprocity is ruled out.