Economizing Trust

Waldemar Hanasz
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The tools of economic theory have been successfully applied in political science, sociology, decision theory, and other areas. Most recently, interdisciplinary studies focused on the question whether economic models can be applied to the goods that are less tangible than material assets or labor time. This paper explores trust as an economic good: it seems to be scarce, there is definitely demand for it, and it is supplied to satisfy the demand. But can trust be produced, transferred, exchanged or accumulated? The main question that emerges is whether trust can be intentionally generated and become a matter of rational choice. The answer to this question is positive. Several patterns are discussed. Trust has its risks and costs. People estimate and calculate such risks and decide how much trust to invest and where. Professionals, politicians, and business people build the reputation of trustworthiness and capitalize on it in their pursuits. The violations of the principles of trust can be very costly and lead to great losses or total bankruptcy. Of course there are some significant limitation of the economic approach to trust and more interdisciplinary research is necessary to develop this area of study.

Keywords: Trust, Reputation, Economic Theory, Intentionality
Stream: Economics and Management
Presentation Type: Paper Presentation in English
Paper: A paper has not yet been submitted.

Waldemar Hanasz

Assistant Professor, Department of Philosophy, University of Massachusetts Lowell
Lowell, Masachusetts, USA

Ref: I07P0838