The Trust Project at Northwestern University

The Trust Project at Northwestern University

Explore Trust in Research, Business and Society

The Trust Project at Northwestern University aims to create a unique body of knowledge about Trust by connecting scholars and executives from diverse backgrounds to share ideas and research. Featuring academics from across Northwestern University and executives from across industries, the videos represent different perspectives on Trust and connect research findings to real-world scenarios.

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The videos cover three core areas:

Foundations

How academic disciplines view Trust
The same way you would plug into a network server, developing trust is all about making a connection.

What Human Behavior Teaches Us About Trust: A Social Psychologist’s Perspective

Foundations
Contributor / J. Keith Murnighan
J. Keith Murnighan Management Breaches,Definitions,Distrust,Government,Reciprocity,Social Psychology,Reputation Management I was trained as a social psychologist. Social psychologists pay attention to normal behavior by normal people in everyday situations and try and figure out why we do funny things the way we do.

My whole approach is about interpersonal interactions. So, I’m looking at small groups, large groups, but people interacting with each other.

Game theory is all about how rational people interact with that. My take — I love game theory because it’s just beautiful, formal, clear theories, with clear assumptions and clear outcomes and clear predictions — it wasn’t designed to be behavioral, and it didn’t include emotional.

So, my research tends to look at, do these beautiful models actually play out behaviorally? Do emotions add to our understanding of what happens and why some of those predictions don’t work?

BUMPER: Fundamental Trust Questions in the Discipline

Our research on trust, folks, is on how trust develops, what happens when there’s a breach. And those, for us, are the two biggest questions because what we’d like to see is people benefit and have efficient, effective interactions.

Game theory is like that as well; you want to maximize your outcomes. And we’d like people to actually maximize what they get in their interactions, and trust has a lot to do with that.

If you can build trust, you can interact more deeply, more effectively, and people get more out of the situation.

Anyway, recently — not that recently, 1995 — a group of three wonderful economists created what we now call the Trust Game. And the Trust Game is a simple situation where two people will interact — they can interact face to face or anonymously.

One person, often referred to as player one — we don’t use the word “trust” in our experiments because we don’t want to cue that — player one gets an endowment, say, of 10 dollars.

They have a choice of how much to send to player two. They can send anything from 0 to all the 10 dollars.

They know that however much they send is going to be tripled on its way to player two. So, if they send the whole 10, player two is going to have 30 dollars, so they’re creating more.

Player two then has a choice to return as much or as little as they want to player one.

So, the question is (this is a great game) — player one trusts; player two reciprocates — what are the factors that lead to player one trusting? What are the factors that lead to player two reciprocating?

And one of the major findings that we have found and others have found as well is that the more player one trusts, the more risks they take, the more player two reciprocates.

So, player twos have this feeling that if player ones have trusted them so much, they’re obligated.

If player one doesn’t trust them much, their obligation goes way down fast. But if they’ve been trusted a lot, obligation feelings come up, and they’re much more likely to send back a high amount.

BUMPER: Looking Forward in the Discipline

Studies of trust have proliferated. And researchers are now trying to slice and dice different kinds of trust: Is distrust the opposite of trust? Or is it something altogether separate on its own?

There’s affective trust, more of a feeling; there’s cognitive trust, where you think it out and calculate.

So, there’s debate about concepts that — for instance, one definition of trust talks about integrity, benevolence and competence.

But when we ask people who do they trust, all three come out pretty high and they overlap in ways. So, are they really separable concepts? I don’t know.

You can have trust in your head; you can have cognitive trust, affective trust, feelings that somebody has integrity.

I am impressed mostly when people behave and act as if they trust someone because, for me, everything’s about behavior. The most important things are about behavior.

Your feelings and your thoughts, yes, take up a lot of people’s time. But I want to see what’s happening in action. And certainly, from a business standpoint, that’s more important.

There are debates in the field, and there will continue to be debates. And people will niggle and nitpick. And let’s just see what people do in important situations, and I think that will be the telling factor and build more understanding.

Research

Significant findings in the study of Trust
Marketing trust is essential to facilitating exchange and connections in the economy.

When Trust Works and When It Doesn’t: Key Findings

Research
Contributor / Kent Grayson
Kent Grayson Marketing Communication,Legal Guarantees,Reputation Management,Vulnerability So, the most influential and highly cited papers on marketing and trust are the oldest. And it’s not just because they’ve been around for a while but because they were the first to document, fundamentally, that trust does facilitate economic exchange, that it does create better outcomes for buyers and for sellers.

And equally important, it showed that trust is a key mediator between things that buyers and sellers can do and these wonderful outcomes.

So, for example, why does more communication with your exchange partner make things better? It’s not because there’s something inherently great about communication, but it’s because communication leads to higher trust, which then leads to better exchange outcomes.

So, since marketing researchers have found this main finding that trust helps economic exchange, researchers since then have published some really influential papers documenting times and conditions and circumstances when trust may not lead to better economic exchange outcomes.

So, one example is a really influential paper by Atuahene-Gima and Li. They looked at relationships between sales managers and sales people. And what they found is, first of all, that when sales managers make themselves more accessible (they’re around more and they communicate more), the sales person is going to trust more in the sales manager.

And you would think that that would lead to greater sales. You would think that it would lead to great sales, but it turns out it doesn’t.

And what that leads to is the conclusion that a sales manager can build trust in a sales person by being more accessible, but one of the downsides of that is that the sales person starts to learn about the sales managers — the things that the sales manager pays attention to, the thing that the sales manager doesn’t pay attention to.

And as a result of learning about those things, the sales person can use information asymmetry to their advantage. If they know that the sales manager isn’t monitoring certain things like whether they go out on certain sales calls, it means that they can cut corners out in the field, and that will hurt sales.

What’s cool about this paper is that it highlights that trust is enhanced by information exchange, but information exchange also gives buyers and sellers information about how they can better game the system.

So, that’s an example of some research that has shown that trust doesn’t always have positive outcomes, that there’s a dark side to it, that inherently, it can be good or bad.

Related to that, there is another string of research that has looked at contexts where trust is going to be more or less influential. And again, there’s several papers that look at that. One example of a great paper that looks at that is a paper by Garbarino and Johnson.

And what they did is, they looked at relationships between people who buy tickets for a theater company and how their experience at the theater company influences their likelihood of buying another ticket.

But the interesting thing that they did is that they divided the people they surveyed into two groups. One group are people who are subscribers; people who have bought a subscription and who go to the theater a lot. And another group are people who are just individual ticket buyers and they’re probably not going to the theater a lot.

What Garbarino and Johnson found — first of all, they confirmed the finding that I’ve been talking about all along, which is that trust is this key mediator between things that companies can do and outcomes that companies want. But they found that trust is a key mediator only for the subscription holders.

For people who are individual ticket buyers, the main factor that influences whether they’re going to buy again is their satisfaction with the performance that they saw. If they liked the performance, they’re more likely to buy again. And trust didn’t have any influence at all.

And the interesting thing about that is that for subscription holders, satisfaction was not a key mediator for future intent, or for likelihood of buying another ticket.

In other words, as a subscriber, you could be a little bit less satisfied with the performance and still have the intention of buying another ticket as long as you trust the theater company.

So, one of the interesting things about this paper is that, first of all, it shows us something that we’ve already talked about before, which is this idea that if you have trust in a buyer, that they can maybe take advantage of that.

If you think about the theater company, they could have slightly worse performances and still have those subscription holders. But Garbarino and Johnson emphasize another aspect, which is—when you have a relationship that’s trusting, there’s more room for experimentation.

So, this theater company could do an experimental production that might not go over very well, but might not also lose their customers. So, rather than just saying that trust has a dark side and people can take advantage of it in bad ways, it also suggests that trust has a side where people can take advantage of it in good ways.

One example of an influential paper that takes more of an economic perspective is by Brown, D.V., and Lee.

They studied the hotel industry, and in particular, relationships between the corporate office and the people who own or run individual hotels. And what they looked at is what safeguards the corporate office can put in place so that the individual hotels are less likely to take advantage of information asymmetry.

Now, what do I mean by safeguards? I mean these contracts or agreements that can be put in place to try and keep people from doing things that you don’t want them to do.

One safeguard that can be put in place is that the corporate office can actually own the hotel. And when they own the hotel, they’re able to come in and really demand that people do the things that they have to do.

Another safeguard that people can put in place is to monitor, is to put monitoring mechanisms or have people on the property monitoring what is going on and reporting back to the head office. What this paper did is, it distinguished between two types of safeguards.

One is more economic, like the ownership one. The other kind of safeguard is a little bit more social. They are things like acculturating people to a particular corporate culture, which means more training sessions or more corporate events that help people to understand what the norms and values of the corporation are.

And what this paper found is that more rational or economic safeguards actually have a backlash effect — that when people feel like they’re being monitored, for example, they’re more likely to break trust and behave opportunistically than for safeguards that are more about bringing people aboard and making them part of the culture.

So, what this suggests is that safeguards are, first of all, not always going to universally minimize opportunism, even though they might rationally seem like they do, but also that people can resent safeguards; they can feel bad about safeguards, and they can actually have the opposite effect that the company may intend.

Applications

Actionable insights for practice

When Trust Expectations Clash

Applications
Contributor / Sanford Goldberg
Sanford Goldberg Philosophy Institutions and Context,Leadership,Regulation BUMPER: When Trust Expectations Clash

We expect certain things from our products. We expect companies to behave in certain kinds of ways, both in the production and also in the marketing of these products.

These are what I would call “normative expectations.” They’re expectations that aren’t predictions; they’re more in the vicinity of standards that we impose on the people with whom we interact. And, in that sense, they’re normative rather than predictive.

They certainly can be unreasonable. If you think about, for example, a boss — a boss might normatively expect all sorts of things regarding his or her employees. But if it goes beyond what is reasonable to expect of his or her employees — for example, the amount of hours worked, what can be accomplished in a given day, and so forth — those are what I would call “unreasonable normative expectations.”

It’s a good question how to deal with people who have unreasonable normative expectations. My impression is that a good part of life with other people is negotiating what counts as reasonable in these normative expectations.

And I think what to do will differ depending on the sort of circumstance that you’re in when you’re dealing with somebody with unreasonable normative expectations.

I think they clearly can be influenced, and they frequently do change. This is the stuff of culture; this is what our culture gives us. If you like, it’s our cultural inheritance.

So, depending on what culture you happen to be raised in, that will largely affect the kinds of normative expectations you have of other people and when you have those normative expectations of others.

So, how to influence these? That’s a question for culture management. If you find that there are normative expectations that are not, from your perspective, reasonable, you ought to try to affect those parts of culture that underwrite those expectations, that justify those expectations, and so forth.

After all, these are the sorts of things that are not visible with the naked eye but nevertheless are profound in their impact on how we relate to one another.

So, I can only imagine if a leader isn’t sensitive to these things, he or she is not going to be fully successful.

It’s a very, very complicated and delicate negotiation when two parties come to a situation with different normative expectations. And unfortunately, there’s no simple answer about how to do that; it’s a matter simply of negotiation.

BUMPER: How Reliable are Reputations?

If you think about our perceptions of another’s reputation, that’s really a kind of perception of how trustworthy they are. Do they do what they say they’ll do? When they tell us something, is it reliable, something that can be depended upon?

And I would say that there are two sources of information that we have. One source is whatever information that we happen to have on the particular person or company — the evidence that we’ve collected over time. And that can include evidence of what other people have said about this organization.

But, in addition, I think we’re greatly aided by our society’s institutional ways of ensuring and enforcing trustworthiness in others.

For example, if you happen to live in a community where being trustworthy is extremely highly valued and being untrustworthy is extremely disvalued, that will give individuals with whom you interact a great motive to be trustworthy, whereas if you live in other communities where those sorts of things aren’t valued or perhaps not enforced with the same regularity, that also can affect other people’s trustworthiness, and so have an impact on your perception of their trustworthiness.

So, in addition to your own onboard resources — the evidence that you have — you also have your society and its practices of generating and enforcing trustworthiness in its members.
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