Forms, Foundations, Functions, Failures and Figures

Bart Nooteboom

Trust deals with a range of questions such as: what are the roles of trust? What can we trust in? Can trust serve as an instrument for the governance of relations? Is trust a substitute, a precondition or an outcome of contracts? The author then goes on to analyse what trust is based on, what its limits are, how it grows and how it can also break down. The role of intermediaries is also discussed.

Chapter 3: Foundations

Bart Nooteboom

Subjects: economics and finance, economic psychology, industrial organisation


This chapter turns to the foundations of trust and trustworthiness. The first part considers the rational reasons and psychological causes of trust and trustworthiness. Reliance can be based on assurance and on trust in the strong sense. Assurance is based on control, with motives of self-interest. Trust in the strong sense is based on altruism. Altruism is likely to be limited, and hence trust in the strong sense is restricted within tolerance levels. Beyond those, one seeks control. Trust may be rational, but is also based on, and biased by, a variety of psychological mechanisms. The second part discusses the process, the dynamics of the production and destruction of trust. How does trust develop where there was none before? When does conflict break trust and when does it deepen it? 3.1 THE BASIS OF TRUSTWORTHINESS AND TRUST There are rational reasons for trust, based on an inference and attribution of trustworthiness. That comes close to the notions of calculus-based trust and knowledge-based trust in the literature. The analysis is normative, indicating what would be rational to do. In a more descriptive account, trust is also based on psychological causes of affect, routine, lack of awareness or neglect of relational risk, and psychological phenomena such as cognitive dissonance and decision heuristics. Some of that comes close to what in the literature is called affect-based trust. Question 7: The sources of trustworthiness On what is trustworthiness of people based? Coercion, self-interest, ethics, friendship, routinization? Does it go beyond self-interest...

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