A formal model of trust based on outcomes

Headnote

The study of trust has occupied scholars from a number of disciplines, who have made limited attempts at integrating the different streams. One reason for lack of integration is that no clear definition of trust exists. In this article we grapple with this issue by going back to first principles to derive a mathematically precise and statistically rigorous definition of trust. In giving a rigorous meaning of trust, we also capture the key elements of the concept as highlighted by various disciplinary lenses. Our definition of trust, although rationally based, is consistent with many of the findings of earlier behavioral and sociological research. Its contribution is in adding precision and richness to our understanding of how trust is created and maintained in various social and economic interactions.

Over the years scholars have studied trust from several disciplinary perspectives-anthropology, economics, psychology, sociology, and political science, to name only a few. As we can expect with such a diversity of scholarship, not only do different scholars address the same problem from different approaches and with different methods, but they have expressed inevitable differences of opinion over the fundamental nature of the joint problem. In spite of the intellectual rewards from integrating the many different approaches and interesting ideas that sprout from this diversity, scholars have seldom attempted to integrate these perspectives or to articulate the key role that trust plays in critical social processes (Lewicki & Bunker, 1996).

This article is a modest attempt to formally and rigorously model the issue of "trust" in social interactions. The model is, at its most fundamental, economic and statistically based-a "rationalist" model of trust. However, because our approach applies a statistical or uncertainty-based view of trust, it allows us to integrate several themes and discrepancies that have cropped up in the literature, particularly those relating to notions of trust as predictability and trust as a positive outcome (i.e., vulnerability). By combining the psychological idea that there are individual differences in trusting and trustworthy behaviors with the economic focus on the situational factors that affect trusting and trustworthy behaviors, our model permits us to deal with trust in a less deterministic way than does most of the existing literature.

Despite scholars' differences in their orientation to the study of trust,...