Abstract
AbstractThis article compares the framing of trusting actions and the role of extending trust versus the lack of distrust in achieving exchange efficiencies. It uses experiments to investigate empirically the impact of the presumption of trust. It also reports new evidence comparing behavior in the distrust game (DTG) and the trust game (TG). The data indicates that the parties to a negotiation should build trust incrementally as healthy skepticism signals merely a lack of trust and not a betrayal signaled by loss of trust. In the experiments, the default of full trust increased efficiency and inequality, with trustors much worse off than trustees, and much worse off than they would have been if they had withdrawn all trust. Trust building is important for the parties to be able to share information on issues and underlying interests.
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