Abstract
How does interpersonal trust (i.e., between individuals) lead to interorganizational trust (i.e., between groups of individuals)? I build a bottom-up theory in which interorganizational trust arises from individuals and their dispositions, actions, and observations. The theory is based on indirect reciprocity, whereby A helps B and then C helps A. Using a simulation model, I analyze (a) whether indirect reciprocity can lead to trust between two organizations even when many people are involved, when the extent of their indirect reciprocation differs, and when helping others is costly; and (b) how the presence of a boundary spanner affects this process. The main findings are that (a) indirect reciprocity can indeed create interorganizational trust under such conditions, and that, in fact, indirect may outperform direct reciprocity. Furthermore, (b) boundary spanners can decrease or increase interorganizational trust: They may decrease it by boosting their own trust at the expense of that of others, and they may increase it by enhancing indirect reciprocity for everyone through four mechanisms: contributing, discriminating, initiating, and consolidating.
Highlights
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Summary
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