Chapter 3: Can Groups be Trusted? An Experimental Study of Trust in Collective Entities
Bill McEvily, Roberto A. Weber, Cristina Bicchieri and Violet T. Ho Introduction Trust is the topic of a considerable amount of recent research in the social sciences. This trend is particularly noteworthy in the economics, organizational and strategy literatures, where trust is considered extremely important for many kinds of interaction. For instance, several economists argue that trust is an essential ‘lubricant’ without which even the simplest forms of economic exchange can not occur (Arrow 1974).1 Trust increases the eﬃciency of exchange by reducing the expectation of opportunistic behavior and consequently lowering associated transaction costs (Bromiley and Cummings 1995; John 1984; McEvily and Zaheer, chapter 16, this volume). Strategy researchers suggest that trust is a strategic resource that has the potential to provide a source of sustained competitive advantage (Barney and Hansen 1995), while other organizational researchers conceptualize trust as a governance form that provides a framework to guide and direct the organization and coordination of economic activity (Bradach and Eccles 1989; McEvily et al. 2003; Powell 1990). Incorporating the concept of trust into economic, strategic and organizational theories clearly holds the potential of producing far-reaching implications for our understanding of exchange, competition and behavior in economic and organizational settings. By focusing on the motives and intentions of economic actors, this line of research promises to explicitly investigate and sharpen the core assumptions upon which theory is based. At the same time, however, integrating the concept of trust into existing theory poses a number of challenges. Chief among these...
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