Prior Trust Research Articles

In Financial Statements We Trust: Institutional Investors’ Stockholdings after Restatements

ABSTRACT How prior trust moderates investor responses to restatements is unknown. We examine how societal trust affects the changes in institutional investors’ shareholdings around a restatement. We consider two competing hypotheses based on the erosion of trust and confirmatory bias. We find the change in institutional investors’ shareholdings around a restatement is more negative for investors from high trust areas compared to low trust areas, consistent with an erosion of trust where high trust institutional investors view the restatement as a violation of trust. Further analyses show that our findings vary with the regulatory or economic environment, type of institution, and type of restatement. Our results are also robust to different tests that address endogeneity and use alternative societal trust measures. Overall, we contribute to the literature by examining the role of societal trust in a dynamic setting where investors’ trust-based beliefs about the credibility of accounting information are not realized. Data Availability: GSS Sensitive Data Files are not available from the authors. Persons interested in obtaining these data should contact the GSS at GSS@NORC.org. Other data are available from the public sources cited in the text. JEL Classifications: G11; G23; G41.

Fast intensive validation on blockchain with scale-out dispute resolution

Blockchain heralds the dawn of decentralized applications that coordinate proper computations without requiring prior trust. Existing blockchain solutions, however, are incapable of dealing with intensive validation. Duplicated execution results in limited throughput and unacceptably high costs. Furthermore, the absence of secure incentive mechanisms derives undesired dilemmas among rational verifiers.In this work, we present Lever-FS, a practical blockchain validation framework that makes intensive validation cost-efficient and incentive-compatible among rational verifiers. It is faster than previous constructions since full-fledged scalability is achieved over optimistic execution, dispute resolution, and backbone confirmation of every potential workload. Lever-FS first curtails the scale of each validation to a single node and introduces novel challenge-response games between potential adversaries and rational participants, optimistically optimizing validation redundancy according to the practical adversarial capability confronted. When there is a rich and stubborn adversary, the backstop protocol is then activated to resolve intricate disputes via a threshold voting supported by concurrent redundant executions. Throughout the game, compelling incentive design efficiently transfers the adversary’s budget to proliferated task rewards for subsequent executions, therefore allowing the user to lever sufficient endorsements for the correct verdict with minimum expense. In addition, fair incentive distribution mechanisms are designed to circumvent the well-known Verifier’s Dilemma. Finally, we accelerate Lever-FS with sharding to enable scale-out backbone confirmation, seamless workload balancing, and optimized unanimous assertion across multiple independent validation instances.Experiments reveal that Lever-FS significantly improves the throughput while lowering expenses of intensive validation with a slight tradeoff in latency. Compared to state-of-the-art alternatives, it removes their brittle reliance on altruism, dense interactions, or massive computational power. It is also robust to conceivable attacks on validation and performs distinguishable ability to purify Byzantine participants.

Does prior trust work as a buffer? Examining the impact of perceived betrayal on customer responses to a double deviation

PurposeThis study aims to explain customer reactions to a double deviation by examining the moderating role of prior trust in peer-to-peer (P2P) accommodation platforms on the relationship between perceived betrayal and negative outcomes such as negative word-of-mouth (NWOM), vindictive complaining and patronage reduction.Design/methodology/approachAn online survey was used to obtain a sample of 246 respondents familiar with P2P accommodation platforms. The model was tested using SmartPLS.FindingsThe results showed a positive correlation between perceived betrayal and NWOM, vindictive complaining and patronage reduction. Unexpectedly, prior trust had positive moderating effects. High levels of prior trust caused more negative customer reactions than low levels of prior trust.Practical implicationsThe findings of this study caution firms about the potential risks to rely on the forgiveness and tolerance of highly trusted customers who may retaliate fiercely to double deviations.Originality/valueThis research unveils the prior trust paradox. Customers' prior trust magnified the negative impact of double-deviation experiences. This study contributes to the service-recovery literature by questioning the buffer effect of prior trust in the context of a double deviation.

Web3 Sybil avoidance using network latency

Web3 is emerging as the new Internet-interaction model that facilitates direct collaboration between strangers without a need for prior trust between network participants and without central authorities. However, one of its shortcomings is the lack of a defense mechanism against the ability of a single user to generate a surplus of identities, known as the Sybil attack. Web3 has a Sybil attack problem because it uses peer sampling to establish connections between users. We evaluate the promising but under-explored direction of Sybil avoidance using network latency measurements, according to which two identities with equal latencies are suspected to be operated from the same node, and thus are likely Sybils. Network latency measurements have two desirable properties: they are only malleable by attackers by adding latency, and they do not require any trust between network participants. Our basic SybilSys mechanism avoids Sybil attackers using only network latency measurements if attackers do not actively exploit their malleability. We present an enhanced version of SybilSys that protects against targeted attacks using a variant of the flow correlation attack, which we name TrafficJamTrigger. We show how the message flows of Round-Trip Time measurements can be used to expose attack patterns and we propose and evaluate six classifiers to recognize these patterns. Our experiments show, through both emulation and real-world deployment, that enhanced SybilSys can serve a fundamental role for Web3, effectively establishing connections to real users even in the face of networks consisting of 99% Sybils.

Conspiratorial thinking as a precursor to opposition to COVID-19 vaccination in the US: a multi-year study from 2018 to 2021

Despite widespread availability of safe and effective COVID-19 vaccines in the US, only about 66% of the eligible US population had taken the recommended initial doses of the COVID-19 vaccines as of April 2022. Explanations for this hesitancy have focused on misinformation about the vaccines, lack of trust in health authorities, and acceptance of conspiracy theories about the pandemic. Here we test whether those with a conspiratorial mindset, which distrusts a wide range of institutions, were poised to reject COVID vaccines before the pandemic even began. To answer that question, we reinterviewed members of a national US panel that we had previously surveyed beginning in 2018. As hypothesized, having a conspiratorial mindset in 2019 predicted COVID-vaccination hesitancy in 2021 better than prior trust in health authorities or acceptance of vaccine misinformation. Those with the mindset were also more likely to consume media that bolstered belief in pandemic conspiracies. Research is needed on the determinants of conspiratorial mindset and ways to minimize the likelihood that consequential health decisions will be influenced by it.

An Efficient Swift Routing Model with Node Trust Identity Factor (SRM-NTIF) to Perform Secure Data Transmission Among IoT Gadgets

According to a United Nations survey, the number of users using the internet has increased to 3 billion in recent years. The Auto-ID Center is a research organisation that coined the word "Internet of Things" (IoT) a decade ago, describing how it utilises wired or wireless networking technologies to create a channel of communication among technologies and networks available over the Internet. Despite the fact that a swing of routing protocols has been proposed in the literature, safe and energy-efficient routing protocol is still a work in progress. Many routing protocols expressly designed for resource limited wireless devices take the same approach and have nearly achieved their full improvements. The Internet of Things (IoT) has recently gained prominence as a result of the increasing number of connected devices being used in everyday human life with network lifetime constraints. Routing expertise is essential for establishing communication between nodes. A node should be capable of self-learning, self-configuring, and self-managing by gathering local knowledge and sharing it with its neighbours. The degree of trust determines the degree of cooperation between scattered mobile nodes. The term "trust" refers to a level of assurance based on node behavior. To ensure secure and proper data transmission in IoT network, the trust level of the nodes is calculated based on node behaviour. Because of the unexpected changes in the network structure, the complex existence of IoT network, and the underived prior trust relationship between the nodes, trust computation in IoT network is a difficult task. All IoT nodes willing to engage in data transmission are given a Digital Unique Identifier (DUI), and the proposed model must define their trust identity factors. Using the DUI, the proposed Swift Routing Model with Node Trust Identity Factor (SRM-NTIF) model, node authentication is performed to verify natural and malicious nodes in the network. The proposed model is compared with the traditional methods and the results show that the proposed model performance is better in security and trust levels.

Lockdowns, lethality, and laissez-faire politics. Public discourses on political authorities in high-trust countries during the COVID-19 pandemic.

This study looks at population response to government containment strategies during initial stages of the COVID-19 pandemic in four high-trust Northern European countries-Denmark, Germany, the Netherlands, and Sweden-with special emphasis on expressions of governmental trust. Sentiment analysis and topic modeling analysis were performed using Twitter data from three phases during the initial European lockdown, and results were compared over time and between countries. Findings show that, in line with existing theory, assertive crisis responses and proactive communication were generally well-received, whereas tentative crisis responses or indications by the authorities that the crisis was manageable were generally met with suspicion. In addition, while government support was high in all countries during the height of the crisis, messages critical of the government as well as conspiracy theories were nevertheless widely circulated. Importantly, countries with the least assertive strategies, rather than clear negative responses, saw heightened polarization of sentiment in the population. Furthermore, in the case of Sweden, a laissez-faire strategy was generally accepted by the population, despite strong criticism from other countries, until mortality rates started to rise. Possible explanations for these findings are discussed with an emphasis of prior trust as a potential explanatory factor. Future research should seek to replicate these findings in other countries with different levels of prior governmental trust or with a different severity of the COVID-19 outbreak than the countries in this study as well as triangulate the findings of this study using alternative methods.

Information disclosure and political trust during the COVID-19 crisis: experimental evidence from Ireland

ABSTRACT The implementation of unprecedented crisis management policies in response to the spread of COVID-19 has attracted the attention of scholars interested in exploring the link between pandemic politics and political trust. However, while the disclosure of information about the pandemic constitutes an important aspect of crisis management policies, the effect of the level of information disclosure on political trust has not yet been investigated. As part of a larger nationally representative survey experiment on the role of transparency on political trust, we collected data from 618 respondents in the Republic of Ireland in May 2020. The pre-registered study manipulated the level of the disclosure of government information about the status of the pandemic (high and low information conditions). We do not find any direct effects of information disclosure treatments on political trust. However, we find that the high information condition significantly increases political trust among individuals with higher levels of prior trust in government, while it leads to a backfiring effect among those with lower levels of prior trust. These findings are relevant for both public opinion and public policy researchers who are interested in the effect of openness on citizen attitudes.

Breach of trust and repair: the impact of salespersons words and actions on buyer trust

PurposeBuilding on prior trust repair research, this study aims to develop a more robust theoretical framework that describes trust repair strategies used by salespeople following a breach of trust.Design/methodology/approachTo achieve the aim of this paper, individual depth interviews with 18 professional salespeople, 4 sales executives and 7 purchasing agents were undertaken.FindingsThis paper examines the value of using trust repair strategies (e.g. restoration, regulation and verbal repair strategies) both in isolation and in conjunction. The results suggest that individual trust repair strategies operate through impacting different dimensions of justice, as justice provides a reliable indicator as to whether the salesperson can be trusted in the future. This paper also finds that combining multiple trust repair strategies can have an additive effect on trust.Originality/valueThis paper uses thematic analysis to inductively identify the effective trust repair strategies that are used by salespeople in actual exchange relationships while integrating these insights with the existing theoretical frameworks in the literature. It contributes to theory through creating a conceptual model explaining the breach of trust and trust repair process, introducing justice as a direct mediating mechanism between trust repair strategies and increased trust. The research also develops a new perspective on combining salesperson words and actions to repair trust. It also provides a managerial contribution through introducing an optimized approach to trust repair in buyer-seller relationships.

Decentralized blockchain-based consensus for Optimal Power Flow solutions

We design, implement and analyze a decentralized consensus algorithm based on the blockchain technology for the solution of the Optimal Power Flow problem. The proposed algorithm enables independent power grid nodes, without prior trust on each other, to reach an agreement on the Optimal Power Flow solution. We decompose the Optimal Power Flow problem using a blockchain-based Alternating Direction Method of Multipliers and we comment on efficiency, trust, security and transparency issues. The successive iterants of the solution of the power flow problem are securely stored on the blockchain, removing the need for a central operating authority, while allowing network nodes to verify the validity and optimality of the solution. We illustrate the effectiveness of the consensus algorithm presented through simulation experiments on the 39-bus New England transmission system, and IEEE-57 and IEEE-118 benchmark systems. We systematically compare the effectiveness of the proposed algorithm with well established blockchain consensus algorithms. The results show that our method maintains the convergence characteristics of the Alternating Direction Method of Multipliers iterative scheme and enables independent network nodes to reach consensus.

Signaling under the Security Dilemma: An Experimental Analysis

One of the most intractable debates in IR revolves around the severity and frequency of the security dilemma. Offensive realists argue that states are compelled to make worst-case assumptions about each other’s intentions, which yields inexorable competition and conflict even between mutually-benign actors. Yet others have argued that rational benign states should always be able to find cooperative signals that are costly enough to be credible, but not too costly to risk sending. If true, this should alleviate the security dilemma and facilitate cooperation, even under high initial distrust. However, there is little empirical work on interstate reassurance and the conditions under which mutually-benign actors can build trust. We address this gap using laboratory experiments to test Andrew Kydd’s canonical model of the security dilemma. We find strong support for the directional effects of the hypothesized signaling mechanisms. However, the frequency of cooperation is significantly lower than the model predicts, and the feasibility of reassurance is highly sensitive to the degree of prior trust. This implies that although reassurance can mitigate the security dilemma, offensive realism may still capture important psychological mechanisms that impede interstate cooperation.

The moderating effects of prior trust on consumer responses to firm failures

Our paper examines how prior trust moderates consumer and firm responses to a firm's failures. We document that relatively high prior trust in a firm can help firms better recover from the negative effects of denying versus accepting failures, but that trust offers greater protection against competence as compared to ethical failures. We also consider the effects of two responses to ethical failures - external attribution and monetary compensation - and demonstrate that these responses may be viable alternatives that yield consumer perceptions that are as favorable as denying ethical failures. Finally, we show that reticence - neither confirming nor disconfirming a failure -elicits the least favorable post-recovery consumer responses. Our findings suggest that it may be possible for a firm to recover from an ethical failure even after accepting the failure, which is an important contribution since little prior research supports a successful recovery from ethical failures.

Autobiographical memories of interpersonal trust in borderline personality disorder

BackgroundEstablishing and maintaining interpersonal trust is often difficult for patients with Borderline Personality Disorder (BPD). How we trust is influenced by prior trust experiences.MethodsFor the investigation of trust experiences, autobiographical memories of n = 36 patients with BPD and n = 99 non-clinical controls were examined. Trust objects and interaction partners, emotional valence, perceived relevance and memory specificity were analyzed.ResultsContent analyses revealed that patients with BPD recalled mostly situations in which their trust was failed by family members or romantic partners. In addition, patients with BPD considered memories with trust and mistrust more relevant for their current lives than the control group. Our results correspond with findings that BPD patients have difficulties trusting close others as well as with theoretical assumptions about deficits in mentalizing and epistemic trust in patients with BPD.ConclusionIn conclusion, our findings should encourage clinical practitioners to address trust deficits towards close others, as well as omniscient negative memory retrieval and interpretation biases which might influence current trust behavior.

Exploring jealousy and envy in communal relationship revenge-seeking

Purpose This paper aims to identify the ways that customers respond to customer-to-customer comparisons that may drive loyal customers to engage in undesirable behaviors. The research examines the role that jealousy and envy play in restoring equity through revenge-seeking intentions. Design/methodology/approach The study uses survey research methodology. The measurement model is validated using CFA, and hypotheses are tested using structural equation modeling. The mediated relationships are calculated using the bootstrap method, and moderated mediation is calculated by creating estimands to test the effects. Findings Customers who feel either jealousy or envy may engage in revenge-seeking behaviors, such as vindictive complaining and negative electronic word-of-mouth (eWOM). Customers who perceive that a firm is unfairly favoring other customers develop feelings of jealousy and betrayal, and this tendency is strengthened when the customer has a high level of prior trust. Customers typically develop envy when their attention and perceptions of inequity center on another customer, rather than on the firm’s actions and anger drives this effect. Practical implications Customers can pursue revenge-seeking actions when unfair actions influence the formation of envy and jealousy through the development of perceived betrayal. Companies can focus on the comparisons that customers make to address revenge-seeking and better manage online relationships preemptively. Originality/value The paths that customers take to revenge through jealousy and envy are conceptualized in a communal relationship setting and further developed. Further distinctions of jealousy and envy are made, and the role of prior trust in enhancing revenge-seeking is found.

Trust building through discursive leadership: a communicative engagement perspective in higher education management

ABSTRACT This paper focuses on trust building as an organizational phenomenon, more specifically, trust building through discursive leadership from the perspective of communicative engagement. The study draws on prior trust literature and discursive leadership theory, adopting an explorative approach in seeking a deeper understanding of organizational trust building in a higher education organization. The data comprises leaders’ speeches and the field notes analyzed by the method of meaning-pattern reconstruction. The qualitative study demonstrates that by showing trustworthiness, the leader promotes an atmosphere for the organizational engagement of the followers. The main contribution is the empirical evidence supporting the confluence of theoretical models regarding perceived factors of organizational trustworthiness and collective organizational engagement in a rarely studied organizational environment. Trust as a core element of leadership appears to be a discursively developing process in higher education management. The findings imply for managerial leadership that the importance of raising the level of awareness of trustworthiness is crucial in leadership. Moreover, this study illustrates how discursive leadership may have a notable impact on the trust building process in the organization, especially in times of crisis. The context of a higher education organization highlights the need for exploring trust building through discursive in other than business-oriented organizations.

How consumers respond to social norms: an evidence from pay-what-you-want (PWYW) pricing

PurposeThis paper aims to investigate consumer behaviour in response to social norms under pay-what-you-want (PWYW) pricing. Specifically, it explores the critical role of social norms such as norm priming and consumer prior trust in the retailer on consumers’ perceived price fairness, trust, willingness to pay, purchase intentions and intentions to spread negative word of mouth about the retailer.Design/methodology/approachData on dependent measures were collected through the scenario-based online experimental approach and assessed using MANOVA analysis.FindingsResults confirm the significance of norms by indicating the critical role of norm belief on consumer responses. Also, increasing the salience of norms by priming them usually intensifies negative behaviour, and pre-existing trust in the retailer serves as an imperfect cushion against consumer negative reactions to norm violation, but this effect is observed to be decreasing with increase in prior trust.Research limitations/implicationsFurther research should consider the contextual (time, place, media) influences and assumptions to increase the generalizability of the findings.Originality/valueTo the best of the authors’ knowledge, this is the first paper to explicitly examine the effects of social-norm compliance by sellers on consumer behaviour in the context of PWYW pricing.

Anonymous Lightweight Proxy Based Key Agreement for IoT (ALPKA)

The Internet of Things (IoT) technologies interconnect a broad range of network devices, differing in terms of size, weight, functionality, and resource capabilities. The main challenge is to establish the required security features in the most constrained devices, even if they are unknown to each other and do not share common pre-distributed key material. As a consequence, there is a high need for scalable and lightweight key establishment protocols. In this paper, we propose a key agreement protocol between two IoT devices without prior trust relation, using solely symmetric key based operations, by relying on a server or proxy based approach. This proxy is responsible for the verification of the authentication and the key agreement between the IoT devices, without being capable of deriving the established session key. We propose two versions. The first version does not require interactive input from the key distribution center to the proxy, but is not resistant if a compromised user and proxy are collaborating. The second version on the other hand is collision resistant, but needs an interactive key distribution center. In addition, we add the interesting features of anonymity and unlinkability of the sender and receiver in both protocol versions. The security properties of the proposed protocol are verified by using formal verification techniques.

Tracing manufacturing processes using blockchain-based token compositions

Supply chain traceability is one of the most promising use cases to benefit from characteristics of blockchain, such as decentralization, immutability and transparency, not required to build prior trust relationships among entities. A plethora of supply chain traceability solutions based on blockchain has been proposed recently. However, current systems are limited to tracing simple goods that have not been part of the manufacturing process. We recommend a method that allows for the traceability of manufactured goods, including their components. Products are represented using non-fungible digital tokens that are created on a blockchain for each batch of manufactured products. To create a link between a product and the components that are needed to produce it, we propose “token recipes” that define the amount of tokenized goods required for minting a new token. As input tokens are automatically and transparently consumed when creating a product token, the physical process of producing a new item out of existing components is projected onto the ledger. This ultimately leads to the complete traceability of goods, including the origin of inputs. Evaluating the performance of the system, we show that a prototypical implementation for the Ethereum Virtual Machine (EVM) scales linearly with the amount of the input and goods tracked.

It’s You Not Me! The Impact of Blame on Redesign After Supply Chain Disruption

Following a disruption, organisations may choose to redesign aspects of their supply base to reduce the probability of reoccurrence, future impacts and/or improve recovery capabilities. However, we know very little about why and when firms choose to respond to some disruptions and not to others. Our study is particularly interested in understanding the underlying factors that shape such decision-making from a behavioural perspective. It utilises attribution theory from the field of social psychology to examine the extent to which the attribution of blame influences choices in the post disruption period. We test our hypotheses through two studies. First, data collected from a behavioural experiment with 140 global MBA students examines the antecedents of blame. Our findings suggest that controllability significantly influences the extent to which suppliers are blamed for a disruption, while severity has no significant effect. Second, data collected from a survey of 115 UK managers examines the impact of blame on supply base redesign. Our findings suggest that blame significantly impacts redesign, but only when the buyer’s prior trust in a supplier is low.

It's not you, it's them: Social influences on trust propensity and trust dynamics

AbstractScholars agree that trust primarily has two bases: trustworthiness—the extent to which a trustee is competent, honest, and has goodwill toward the trustor—and trust propensity—a stable trait reflecting the trustor's generalized belief that others can be trusted. Due to this trait characterization, the literature has largely reached a consensus that trust propensity is only an important base of trust in the earliest stage of a relationship—before information on trustworthiness has been gathered. Additionally, the trait conceptualization of trust propensity inhibits it from being modeled as an explanatory mechanism. Drawing on accessibility theory, a theory of trait activation, we argue that trust propensity has state‐like characteristics that are “activated” by the daily treatment an employee receives from coworkers. Our model highlights that the social context—predominantly ignored in prior trust research because of its lack of relevance to dyadic perceptions of trustworthiness—can have a substantial impact on dyadic trust. Across two multisource experience sampling methodology studies, we provide evidence that state trust propensity transmits the effects of citizenship and deviance received to trust in a focal coworker, whether that focal coworker is a source of that treatment or not. We also address how general levels of workplace unfairness—a between‐person construct—influence these dynamics. We discuss the theoretical and practical implications of these within‐person dynamics for fostering trust within organizations.