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"To trust someone implies taking some risk. To be trustworthy implies that you will try to reduce risks to those who trust you even if it is costly to you to do so. For economists trust reduces the transaction cost of trading.
Berg, Joyce, John Dickhaut, and Kevin McCabe, "Trust, Reciprocity, and Social History," Games and Economic Behavior, (10)1995, pp. 122-142.
Trust is considered to be the the basic building block of any society. The extent of trust determines whether economic institutions can function. Take as an example the value of money. Banknotes are only as much worth as the trust of the consumers in the shops/banks to accept them in exchange for goods or services.
- What is trust? Discuss definitions from social sciences and compare them.
- What is the role of trust in the economy?
- Can we measure the trust consumers have in the economy?
- Are there differences between interpersonal trust and trust in institutions?
- Consider the case of interpersonal trust; economists measure such trust by experimental trust games, or by questionnaires; compare the questionnaire and experimental behavioral measures of trust.
Links & Literature
- Berg, Joyce, John Dickhaut, and Kevin McCabe, "Trust, Reciprocity, and Social History," Games and Economic Behavior, (10)1995, pp. 122-142.
- Vyrastekova , J. and S. Onderstal (2005). "The trust game behind the veil of ignorance: A note on gender differences". CentER Discussion Paper No. 2005-96. Available at SSRN: http://ssrn.com/abstract=807724.
- Vyrastekova, J. and S. Garikipati (2005). "Beliefs and Trust: An Experiment". CentER Discussion Paper No. 2005-88.
- Cook, K.S. and R.M. Cooper (2003): Experimental Studies of Cooperation, Trust, and Social Exchange. In: E. Ostrom, and J. Walker (Eds.), Trust and Reciprocity . New York : Russell Sage, 209-244.
- Glaeser, E. ; Laibson, D. I. ; Scheinkman, J A. ; Soutter, Ch. (2000). Measuring Trust, Quarterly Journal of Economics 115, 811-846.
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These guidelines has been created by the Nijmegen School of Management.