studyof Cangroupsbe trusted?An experimental trust in coliectiveentities Bill McEvilv,RobertoA. Webet,CristinaBicchieriand Yiolet T. Ho lntroduction This in the socialsciences' amountof recentresearch Trusl is th€ toprcof aconsiderable literatures, and stralegy organizational trendis pafiicularlynotewo hy in the economics, extremelyimportantfo( manykindsof interactionFor instancq wheretrustis considered 'lubricanl'without whicheventhe sim' arguethat trust is an essenlial severaleconomists plest forms of economicexchangecan not occur (A ow 1974).'Trusl incrcasesthe by reducingthe expectationof opportunisticbehaviorand conseifficiencyof exchange transactioncosis(Bromilevand Curnmings1995; John 1934; quentlyioweringassociated suggestthat trustls a McEvily and Zaheer,chapter16,this volume).Sifategvresearchers strategi;resourcerhat has ihe potentialto providea sourceof sustainedcompetjtive conceptur€searchers (Barneyand Hansen1995),whil€ other organizational advanrag€ guide direct th€ orgaand alize trust as a governanceform ihat provides a framework to eral' 1989; McEvily nizationandcoordinationof economicactivily(Bradachand Eccles 2003;Powell1990). theolies lncorporatingtheconc€ptof trustinto economic,strategicand organizational understanding clearlyholdsthe potentialof producingfar-reachingimplicationsfor our settingsBy lbcuscomp€titionandbehaviorineconomicandorganizational of exchange, jntentions of economicaclors,this line of researchpromrsesto ing on the motivesand upon which theory is basedAi and sharperthe coreassumptions explicitiyinvestigate th€ sametime, howeverintegralingrhe conceptof trusl into €xislingtheory posesa Chief amongth€seis the questionof how to ext€nd- or whethel numberof challenges" to extend an individuallevelconstructsuchas lrust to moreaggr€gate it is reasonable levelsof analysis. To a largeextenlplacingtrustin individualsandplacingtrust incollectiv€entitjes(eg' in tl1elirera_ instituiions,etc.)areusedinierchangeably indusrries, groups,organizations, iure and without specificconsideration for whether dilierencesin the object of trusl are meaningfulor appropiate. For example,transactioncostseconomicsproposcsthat 'humanagentsare givento opportunism'(Williamson1985'p 64),but thatr/'nr musr againsttle threalof suchunirustworthybehavior.As a result theirtransactions safeguard thereis ambiguityabout the objectof irust lhat is most relevantto minimizinglmnsaction costsof exchangc the individual agenlor the parlner organizationThis raises Firsl and forelnost.doesirusl existat difler€ntlevelsof analysis(indiseveralquestions. lf so,is trustacrosslevelsrelatedanddoestrustat onelevelinflulidual v;$us collective)? jf on€truststheindividualageniwith whomonedeals, encetrustat another?Forinstance. Oris it evenposmoreincliDedto trustthat persor'sorganization? thenis onenec€ssarily lbr its iDdividual sible to trust a collectiveentity, independentof the trusl one has 52 Ca groupsbe trusted? 53 perhapsmostimportantly,doestrust ar differ€ntlevelsof analysisaffect iols in dillerent ways? these fundamentalquestionshavereceivedrelaiivelylittle researchatter, thewidespread applicationof trustto economicand oqanizationalrelationcollective entities.A relat€dslreamof researchin sociolosvfocus€son 1979;Giddens1990)and 'institutional'based' (Zucker 1986)trust oftluslreferto abstractstructuresthai shapeexpeciations throughgeneralof behavior. Systenand inslitutional,based trust createcommonlvaccepted assumptions. and therebylowerthe inherentrisk of irusting a counterpart 2001;2001).Simjlarto our notion of trust in collectiveeniities,systemand tlusl arc 'impersonal'lbrms of trust ihat arenot basedon familiarity incindividual.At the sametime, our view of trust in a collectiveentity prethattheindividualis involvedin a directr€lationshiD aeconomic exchanse in this thecollecliveentiiy.whereassystemand insiitutional,bascd trust primarily €conomic framework\\rithinwhichtherelationshiD is embedded. For instance. of buy€r supplierinlerfirm exchanges, trust in a collectiveendrywould be itrgmanager'.s trust in the buyer organizationwhile systemand institutionalwouldfocuson, for example,the legalsystemof contraclenforcementj reguies,third-partybrokers,etc. thework on systemand institutional-based hust is conceptuallyrelatedio ontrustin a collectiveentity,thereis virtuailyno empiricalwork validatingthe of trustin collecliveentities.A notableexceptionis a studyby Zaheerer al. thatexplores,lsing surveyresponses of boundary-spanning agentsin buyer interfirmexchanges. the relalionshipbeiweentrust in a specificindividuaidealt trustin that individual'sorganization,referredto as interpersonaland interionalt st respeclively. Zaheeret al. (1998)find that interpersonaland intertrusl are related,but distinct;economicagentsdiscriminatebetweenthe ol trust,but also view trust at differentlevelsof analysisas stronglyrelated. theirstudyprovjdesevidenceconsistentwith rhe conceprof trust in a collecity,it doesnot definitivclyrule out the possibilitythat trust in a collecliveentity ir-organizational trust)is merclyan artifactoftrustin theindividualmembersof iveentity (i.e.interpersonaltrust). ID parricular it may be rhe casethat trust i\e enliryi. , mpl) Jrtunclronof Lrrrr rn irsindi\id.rdI nremberc. lf so,lrurLin iveentity is reducibleto trust in individualsand doesnot exist as a separate . Thissuggests that validatingthe existence of trust in a collecliveentityrequires that is not specificallytied to trust in individualsand ruisesthe questionof thereis someaspectof trust in a collectiveendrythat existsapat from trust in members of a collectiveentily. p r r D o s oe i r f i c c h d pe - i ' , o c r p l o r et h e r c h t i o n s h i bp e t $ e e nt r u . t n i n d , \ r d ( r a l r 1flrstin collectiveentities.andthc relalionshipof thes€two typesof trustto econornic We argue that trust can be meaningfullyappliedto economictransactions ing both individual and collectiveentiiies,and that trust at theselwo levelsis W e p r o p o s et h dI e c o n o n r ( a c L o i st o r m p e r c e p r i o na, b o u r r h e r - J . r $ o | | h . n e s ro f iveeniitiesbasedon exchanges conductedwirh individualmembersof the collec!Thistrustin the collectivethenbecomes transferabie to otherindividualswithhthe se es as a proxy tbr individual tmst wher€ derail€dknowledgeof 51 HdulLool t)l lrt\t t.nrath llldi\'1ilLlm l | lc D b . r s o l t h c c n l l c . 1 i \ i 1 ]i s l l l n i t e d, : , fr r b s . n r( l \ 1 c E \ i l l c l x l . l 0 l ) l : S t e r d l00l).Ibisirr[..\cn\l].rllrcfcis1roferson1obclic\crhrrthcscolh.rir.li!iluilhrlt size l i k e l r I o e \ h i b i t s i I n i l r t lt r u i l r c l r L c dp f o l r e l I i e s . -hl L r -l(f u r l i n r h t c o l l c c r i \ cc r r r l l yr su s e d Etig $ i t h o l l r . f d ) c m b e $ L n i r d i \ i d u r l \ n r . l i ! c i c n d e d l o l f r n s r c l i o n ! a s . r l i c L r f i s l ifcb f t f L r s l i s l i t t l c o ! n o i r r l o r r t h x r a r c u n k n o $ | . 1 l r d x b o L r r t l f i i c h l h c i c o l l h c c o l l e c l i l i t ! .e \ ! l i r o s c mriionibfdclcrnrinin!Lrust\\orrhi|csslnlhis\ir)'.nrcnrbcfshiIitrcollccrNil)ofgfoLrp c r i b c l u k . n t o s i l n r l t r r L \ 1 $ o r 1 h i l r .(sKsr r n r e f c l I l l 9 r ) 6 ) .\ i L h . u t c r c h l r ] e n r b ehf a \ i n - s r o . r h i L r i rh r J o r h c r 1 r ! ! 1 $ o r l h i l r e s s d i r e c l tl )o u l l o t h c r t ! r r i c s i r l r r ) e c o u o n r i ce r c l r a n g e . vid B r s c do n t h c x b o ! . i L t . r s .{ . x d d f e i st h e l a L l d \i t g r c s c xcr h q u c s t i o n :^ d , t r i f n 1 L t r l r t h r t l t o u t t t t r l t L l t n t t , r t ) o . n t i i t t t t t t t n t s t r o t h l n s t r t l r ( u l t)(n.t)tn ol t.fittt\L S t a t l )u i r l h \ ' l l r r t ! t \ t t 1 tl i t ) n ,t ) l r l h u t t , t f u 1 ! . r ! ) ( t . 1 t i t t| \ i t n t t i . n I h I t D t r r t l \ r i l t i ) $c i t t f u L t o t I )t . t r r \ ' \ t i t )D t . ! | i t t ! l u l . t l . t " x 1 1 k r tt l t r t t l t t \ t r r ) 1 h t i r , \ \ : ) w h . r . r b . o u t c o c s o l q u c s r i o r \ \ c c ( [ . l r c r c . l x l r b o f r t o | y e ) i p . f i i ] c n L lb e\plofc lhi! e c o u o . r l cc \ c h u r g c sn c r c i r l l u . l ) c e d b ] I h e d e g f e e1 ow h i c h s u b i c c Ll\r u \ 1 c . 1r h e i f c o u n r . r p n r L sr n d L h cc \ l c n l 1 o r l i c l t t h o s ec o L r n l . r t r r L sl c l u r l l t u t h c l d t h e I l r s i t h r r tw a s f l t c . d r n L h . m . O u r r c s . r f . | b L r i l d s o n f f e l L o n i . \ p . ! i n c n r s u i n g l l rr cl u n ( o r - l r r e s t . e e r l e r d l h i \ p r | 1 r d r g nbr y r r c l u d i l r g. r l f e r l r e l r lr r I n e n L) g u n r c( c g . l l c r g c l ! 1 . 1 9 9 5 ) W i \ c \ ! i l ] r i l r 1 l r . c o n l e \ l o l n r i r i r l l r d c l i r . d c d l c c t i ! . . n r 1 1 1 c sl n. rhich c m b c dc x c h r n g c ilt r r r o r ] g i l r f i \ i , : l u l l e c o n o l n i cr r c l o f si L r . t o l o r r g . r i s o l x l e d this tfertrrcrl. llInriLctrors l n l i n l i c r l t h r o u g l r i r c l i ! i . l L r x l s l l r e n r b e t s h i p t o l l c c l r r . . n n r i . s . e l e n t s .L r L rmt t h c r u r . Lr] Corccpnhlirirg trust ir N collectile e tit! T r ! \ r r s $ i n h c r c n L l rc-o r r f b \ c o r c e t l { C o f u z / l n r I 9 l l ) t h r r l ) . r sb c c n s l u . l i e . lf t o l n r rLrnrbco f l d i l l i r . r r d i s c i p l j l r r f y| e f s p e c l i ! c ! A s r r r c s u l t .r s r t t ' r a l i c r \ o f . l e f i n i l i o r s D c l p i L cr h . b . l . r o g c l r c i l ] i n c o n c e | I L u l i z r l i o r s .r h . r c d . r r u r r b c r ' o l c o l r t n o r e\in. e l e r r e n t su n l J - \ i n gr h . m ! r ) d i l l c r e | 1 u s l g e so l t l L r s l I n p r r r l i c u l r t rt h c r c i s s t r i c s p f e r d tltt tt)\iittt\t1tttdtinrol r g r e e l n e l rrll r r r t 1 r ! / l 1 / / , | | i l ! i t , ! t t t \ ! r l ) r t t ! l n ( r l f u l n d . t t ( N l r l e f h t l t t l t i . r , / , / h , : ' e r x l l 9 t 5 r R o o r s c r Lcr l r l l 9 r ) l ) . i \ { o f . o \ e r ttu itlurlin\ t)) t . c . s s ! r \ c o n c l l i o n s .l n l e l i r t c r r l . a l r d u u c e u i J r l ) r r c lbf tlusr ro rrisc. |cndt|c. p r | 1 ! . a r n o t b . J i r l J illc$ . t i t h o r I r c h . r n c eo n r d . n c c D c a n s t h ! 1 1 h . i r l c f c s l o l _ o f e dete p o s s i b i l i r f , ) l . \ p . r i c n . i n g n c g x l i \ co u l c o l x e s r o l h c r p i f L l . l r ! r c c r a i r l ] r D . r I s t h r l I h c r l c u p J u i l h r c l\ l c i g r f l l 9 1 5 ) l f f e l ) i n g o n r n o r h c r f c q ' i f e s I r k i n ! r t o l br tl-.\rii rxrl) 1 r!st $orl.l Irol be r n l c n l i o n s c o u l c l b c r s c . n x i n e i L \ \ i 1 h c o n r p l c l c . . r L ! i n 1 \ . rrolhcr's \ , L r l f u u b l t u n d c rt h c c o r r d i l l o | s A c . ( i r d i n ! l ] . l r u s t i s r l r c c h o i c c r L r m r k e o n . s . l l recdcd. r l c . l ) c r d c r c . x . d o r c c r l a i l ] l t . ot C b f s i ! r . r l $ , i t hL h cb r o r J . r l i l c f x l ! f c o I l f r L n w e f e l c r l o t h c c \ l c f l l o n h r c ho n c i n d r -llrc dcgNe \ i ( l u r l l r u \ L \ r r o l I c r i r d j r i ! l r L r ll i l h \ h o r r n r c d c r s u s , 1 / ! r t r , , i , L / i r / r ! r . t o \ ! h i c | r \ r l . \ r l r f r c n ' n l r l i \ e l n r s l st h c s t ) c c i l i f. l r . h x s i r g m ! r r g . r { i 1 | $ h o u r s h e f e l l s i \ r n . r x r n f l c o l l f r i s li n r n i r d r \ ' l d L n Il .r . o n r r r s r . , 1 / ! / t r , i r , , 1 / . ! / a . . / r / i l ir c f r c s e n l s L h cc \ l . i r l o l 1 ru i l l h r 1 i r I | l l d i ! i d L n lf I r c . i L nr c o l l . c l i r i L t \ ! i t h r ! h i c I s h . f c r l s . l f u s l i n r c o l l c c r n cc r ) r i t )c r i s l s b c r r \ . c 1rrn i r d i \ d n r o n t h c o n c h r n L lr r ( t ! . o l l c c l i , u o l n r . l i ! i d u ! l s o r i 1 | c o 1 L . f . , \ s . r l . sr c | f c r e l r l r l i \ ! \ l r u ! L l i r r l h . b u \ c r o r g d r i / a l i o r )l l r r l s h e n r . s x c t s s i l h i s r l r c ! r 1 r t ) 1 eo l l f L r s l n r c o l L c c L i \cr r l i l \ T h . r l i s t r r c u o r b . 1 \ c c I l r r L r r i . ! n i ! r ! l i ! i f u r l x l r ( l 1 f ' s l i n r c o l l c c l i l c . r l i L t i \ b r \ c d o f r h c o b j c c l ol rl u s l .\ \ ' l r I r c r L s l h c { ) u r c c o lr ru s lf c s i . l ei sn i n l i v r i l L u ll!i r b o l h . l h . o b j c . t o ln u s t d i L l i r i . l { x r l r c r l l u r r l ) c i l r g . l i r . c r c d . r I . rs t - . e c i f i nc d i \ i ( l L n l .t h c r . l c r c n l o l L r i L i l r i r r c o l l . . l i \ . c n l r l ) r \ u n . r g g r . _ ! u l e ih Ir g d ; I t Cangrcupsbe ttusted? 55 syslem compnsinga numberof individuals.The placingol trusi jn a collecrive raiherthana specificindividuat,is consisrenr with detinirionsof trust rhatempha, )nndence in or relianceon somequatity or attribuleof a le$on or thing,@;ford ,ictordry, emphasisadded).2 theconceptual distinctionbetweentrust inan individualandtrusl in acollecrive tufairlywellestablished, empirical€videncesubsrantiating thedistinctionis largely t.Asnotedpreviously. in orderro disringuishrhetwo formsof trust it is imooriani ratethetrusran individrai placesin acollectiveentiryfronl rhetrust rhat anindijn Indirrdualmcmbemof rheco tecrjree iry.For in{an.e.in place. i di\ idual m 10trusi a certainorganizaiion.but may only be referringto rhe lrustwodhi, specificindividuals in the orga zation or of rhe generalpopulation lrom which ron drawsits membership. Similarly,onemay generallybelievethat peopl€ hy. and thereforemost oryanizationscomprisingordinary peopleaie aiso O! oncmayfeelthatagroupis rruslworthybecause of famil;ritv wirh a of . of .heg.oupdndtl-eiflrusrsofrhine$. \\e arguerharrhc.earenorin.r"rrc, a collective entity.sincethereis no separateatribution of trustworthiness to ionasan enrrrlin ir.clI lncreJd. se ,ugfesr,harrru\r in a co ec.i\renriti 'ieanl) 'rom rru,rin indi,rd di.ringurshea Jatsby.rLd)irg a bchar.orat mrn_ of trustthaais clearlyseparable across,and distinctlyattribulableto. the two trust. tangletrust in individuals and Inrst in collectiveentities.we desisneda e \ p e r i n e n r " r a l l o $ e dL r r o d i r e c r le) \ p l o r el h ep o * r b i t r Lr )h a r r u , rm a y for Eoups,independentof the rrust for rhc indiviclualsin rhosesrouDs.In th; i m e n t s . u e c - c a r e d abraesr iyc t o r - o t c o , l evcer u . i n p a v a f i u n t ol . * . t t - t n o " n rul groupparadigm'(Tajfeler al_1971).Researchon njnimal groupsshowsrhat is a discontiDuityberweenindividuatand group behavior:peoplctend ro behave whenconfrontinganotherindividualor a group.or whenthey themselves act ,upmembers.What is evenmore striking is thar rhis disconrinuityoccuN even th€groupis createdon the basisof an inconsequenriat criterion,and groupmem_ Lrprsanonyrous-We lhus expectedto find a differencein behaviorwhen subjecrs facedwith'unlabeled'individualsas opposedro membersof a designatedgroup. iabsence of prcviousjnteracrionswith a specilicmember of a group.wewere-intei_ in exploringwhether an initial expedence with an anonymousmemberof the same translaiesrnto a srereotypical judgmenr of the whole group, on somechosen pafticular,we €xploredthe extenlro which subjectswerclikely to exhibit trust in rersubj€clbasedon experience with a previousmemberof tha! subjectt group. ! participantsin our expedmentplayedthe rrust gametwice.Our focui is on theactionsof thefirstcounterpartatTected decisions whenplayingihe gamewirh the counterparl.Weareespecially interested in whethermembership ofthe twocoun_ ; n tl1esame'minimal group'makesthis eft'ectstronger.We find a modesrellect. bothmagnitudeand significance. Howeve! ihe presenceof a posiriveresultis com_ L evengiventhe modestsignificance, sincewe usedrhe weakestpossibleform of identityinourexperimentsMofegenerally,thefindingisimpofia;t becauseilpro_ aclearand carelullycontrolleddemonstrarion that lendssupporrlotheexisrence of in collectiveentities. 56 Ha dbaolt oJ t)ust rsuth play As 'ls..t'nc sugges(s.lhe trust game createsa sillralion rvhcfc onc plaler nrst decide whclhcr b l.ust another and ihis other rnusr drcn dccidc rvhcthcf b honof or abusethis Lru$l.Spccilically.Phlef I isgiven someinilial r! calth .rllocauoDoI$iich shemust decide ho$, muoh to ir st to l)laler:. Play.r 2 c.rn bc lhought of as an rgeni ol l,laler I who h . t st h c r b i l i l y ! o t u r n t h i s r n r s t e da m o u n li t ] t o a n c l c n g r c x t c f s u mT . h e r e f o r ei h e i m o n n l rccerledlry Plar-cr2 is so'ne muliiple of the amount rruncd 10 Pl.Nc.2 by Playef 1. After rccelving this .rnrounl. Plxvcr 2 lnust decide how much. if .tn!. of thc tolal nrnount recei\'ed1()rclun L{)Pla}cr l. Ihis ga c niodcl! $evcral situations in rihich ihe arlrrcri\c.css to one pariy of a $,elfarc;ncrcalnrg in\'€srment hinges on the rrun\rorthincss ol nroiher. For insrance. considcr I silualiolr \4herethe olvnef of a snall li.ln ha$ 10 dccide how much rrrxrlng io prolidcan cmplo,"-cc. This lraidng is costly for lhc owncr ol th€ ljrn, burcan yield greater proflls lbr borh thc cmployee and ihe firm. pro\ided thc cnrplo,"-cc I cnrairs wirh the fiftr1 altef ihe training. ODcc thc owncf decjdeshowmuch to connnil to lraining.rnd rhe rftiring actually takes placc, thc crnplor-eeihen decides hor lorg 1() rcnrain $jtb rhe lirm. Assuming lhal the employcc can rcxlize greaief pfofit b) lealiDg ro go to nnorher lifnr once the trainlng is rcccivcd. lhc problem is exactl)'.thc onc nrodclcd br the tfusr game. Player I llhe owDcr) dccdes how much of sone allocation Lo comnit to Player 2 (rhe emplolee). who Lhcndccideswhether io ho|or this Lrusl (rcnrain lvith ihe firm, h \r'hich caseboil cnrploycc and o\\ner receivea beitef payoU lhan i1 !| cre had been no n xinhg) or rbxse this lrusl (lcavc rirc lirm immediriel,! nfter training. yi.lding lhe highest pa,lof to ihe employeebut lhe lo\lcsL Lo Lhco$,ner). The gamecar also be describcdlbr m allr. In ihe conrlnuous versnn o1 lh c ganc Pla)€l I rs glren sone anounl irr--0. u4rich sle can dilide betwcer onc anrount $e keepsfoL hefself rnd one shc rrusLslo Pl.Lyer2. Label ihe amount shc trun! 10 Playef 2 as -r, with 0 = f = l J ' ,T, l c a o u n t - r i s t h c n m L r l r i p l i e d b ) ' ' . a c o n q r a n l . f > l . s o t h a t t h e s e c o n d p l a y e r recelvesfie grcatcr anrount,-\-. Player 2 must then decidc what proporiion, i, of rr to r e t x f n t o P l a l c r l . l c c p n r g l h e r e s t ,( l - / i ) r , f o r h n n s c l i A s s u m i n g! h a ! l , l a v e f 2 a l s o receilesso e6xcd sun.(u4rich mighr bezefo). ihe follolving arc thc p.Lyolls lbr the gr me: l , a y o f f1 ( ]P l a y c rl : I , a y o f f I o P l a y c ,l , rr= (r/ r) + r,* = a + (/o ( 1 rr=.r l)r\ ll.r Player 2 nolcs s.cond and the choice of /i does ro1 afcct .r. $,lrich has alr rd) bee d e t e r i n e d . T h c r c i b . c .t L ! l o n g a s P l : r ) e r2 l s n a x i n i / n r g l i s m o n e t a r yp a y o l l . h e $ i l l s e l e c i I e q u . r l 1 0 z e r c a nkdc c pt h c e n t i r e a m o u n i fr . K n o , i n g t h i s . P l a y c f1 s h o u l d a t w a y s keep the erilre anloxnt It and scl r ectuaito zero. lhus 1rrrhc uDiqu. subganle-perfeci Nash equilibrium to the ganc. -r = /r = 0 Tr = ,| and ,, = .. Il-(-Jr ,. i,er.,i .. lorr.r b..- r.c r..or ,l';.d,r,rP.,\. l.Jn e..Jro".l outcome lhrt Pareto do rialcs (i c. is nofe eflicient thar) ilis cquilibriunl. This is t|xe for ar) outcome nr which -r is grcatcr than zero and /u is grcalcr than ore. rne<rningthat Playef I lnveslsa positivc anount and |eceivesrnore than thal aDounl back lionl I,lalef2 Sevefrl laborarory crtcrinrcnts studied dre trusr gane. In rhc lirs! c\ample of such a slud)'.Befg el :1. ( 1995) uscd thc Lrustg.Lmeto determine wherhcr or no! lrusting behavior lan be found Nhen social cnli)rc.mcnt i! not possible.ln their eifcrincn!s subjecrs five ! T. the t Buc tior Play full grna Con C alth for Res P,o Re Prc Prc Rcl Bu (m by Cangrcupsbe trusted? 5'7 thegamein an environment where the usual self-interestedmotivatioDs assumed islsto leadto trustingbehaviorwereeliminated.Subjectsplayedlhe gameonly undefcomplere (doJble-blDd) mrr).ln rprteof thrsanonyruOandldcl "non) ition, only two of the 32 subjectsin the role of Player I sent $0.On the other hand, i€ctss€ntthe entireamountof $10.The averageamountsentwas$5.16and the amountretumedwas$4.66,indicatingthat sendingmoneyled to slightlosses on for PlayerLr together, the experinentsby Berget a]. and olhcrsusingdillercnlvariationsof game with varyingpayoffsandparameten showsomeconsislentrcsults,even cultues(e.g.Van Huyck et al. 1995;Ciith et a]. 1997tSnijde$ and Keren 1998: el J. rnprcss: Ashfrf et al.2005).f r|'t. Iherubgame-perfect equrhb. rumpredrcisrarclyobsefled.Most subjectsin the role of Player1 senda posiliveamountto 2. On ihe oth€rhand,most subjectswho sentmoneyas PlayerI did not sendthe r. A secondmain findins is that while many subjectsin the role of Player 2 a positiveamountto Playerl, the retumstendedto be slightlylessthan the ori general investment onaverage. Thereforc, whilesubjectsjn exhibited trustingbehavlrusr$ai oftenrcpdid.bul J.ualb nol .Jmci,.nrly ro prcvenrr, fiom beingco.lly. which usea variationof the trusl game,we expecta , in our expeiiments, amountof trustingbehavior.Howeverour atteniionis primarityon whether behavioris influencedby past experience with counterpartswho belongto the previousstudy exploredthe cornection betweengroup boundariesand trust, s i r h a n e n r r e l )J r H e r e rl o t c u rt h a no u r , .B L . h a ne r a l . r ' 0 0 ' ) u s e dr a n d o m and thenused !o dividesubjeclsinto two groups(Proposers and Responders) lusl gamero mea\uielhc eirenllo $ l'ichrubjccr.i1 rhefirrl groupc\hibiredlru.l 'ectsinthe secondgroup.The treatmen!vaiable wasthenalureof therelationship Proposers rnd RerpondeEIn a Drrccl(onJrtion.a Proporcr*r)t mone,lo a who then sent money back to the sameProposer.In a Croup conditioD, serA sentmoneyto ResponderA while ProposerB sentmorey to ResponderB, Responder A then sentmoneyback 1(:)ProposerB wlile ResponderB senlmoney L bul lwo Proposers wdsindr-e, rnd r\ o lo Propo'erA. In rhl.coid||ion.recrprocr.y were mulually linked by lheir aclions-Finally, in a Sociely condition, A sentmoney to ResponderB, who senlmoneyback to a randomlyselected C. In this conditior! reciprocitywasindirectand links belweenProposers and weremuchmoredistantthan in the GrouDcondilion.The resultsin all three itionsrevealed significantamoun* of trust andreciprocation, thoughboth of these a ' r h e i n t e m c l r o nb e L u e e nP r o p o r r ' r n J R e . p o r J e r ' b e c a m el e L . d l e ( r . ei al.'sexperiments demonstrateth.t hust existsevcnwheni1 involvesindirecl lion bel$eermcmbeho[ ,"1donly derermiredFoupc. bur rhar rhi. ru.l by the amountsenlby Proposen)js lesslhe moreindirectlbe relationship. Thenudyb) Buchanel al. rs relerantlor our erpe imenlsincr'r .howsthatsLrbject: for it trustingbehaviorevenwhenthe objectof this trust is not direcllyresponsible ingrt.OneintefpretaUon of lhel rerul. r' har.e\e. { rlh group.dclcrmined anentirelyrandomproc€ss,subjectsare willing to trust counterpa(swhensomeone I nr h r cs o u n r e f p ar rgl f o u pm u s il e c i p r o c dl h l ei sl - J . l I n l h r s c a s e l h e o b j e c l o I r r u . l to be the group ralher than a specificjndividual.aWllile the experimenlsdo not 58 Ha dbaok oJ ttust rcsearch constitutea directt€st of trust in a collecliveentity,the rcsuitsare consistentwith notion that subjectscantrust a groupratherthar an iDdividual our ex'€riments differ from lhose of Buchan et al- in that we dileall' explore trust m pasthistoryof dealingwir collectiveeniity.In particulatwe focuson whelhera subject's propensity to trust another member gloup that subjecl\ influences of a one member provides about the such history information that group, the beyond the same second individrlal. of the \rorthiness Experimentald€sign minimal grouplabelsusethese1abe13 Our experimenttestswhethersubjectsassig1led individual$ In our expedment, of other the trustworthiness inferences about draw liom th€ pop jectsplay the trust gametwiceagainstlwo subjectsrardomly selected these belween is the relationship variable participants. Our treatment other tion of su to as two other are simply referred condilion, they the Control subi€cts. In olher of the opposite role (Player I or Player 2). which was randornlv detennined at the beg ning ofthe experiment.lnthe Group condition,thesetwo othersubjectsaremembe$ the same'minimal group' lhat was delermined by responsesto an unrelatedquestion. are particula y interestedin how subjectsrespondto the outcome of the first game,wl playing the secondgame.Our hypothesisis that subjectsin the Group condition wil more influencedby what their first counterpart did than those in the Control. our exp€rimenlis primarily intendedto testwhetherperceptionsof trustworthiness i inditr,lual'$ho arern lhe'amegroupthanacross rran.lerndmore-eadilr "cross vidualswith no suchgrouplabel. Subjectsin our experimentplayed two rounds of the following discr€t€version of trust game: Player I was gilen an allocation ol $4 at the beginning of the game. PlayerI thenchosean amouni !o sendto Player2 This amountwas$0,$2 or Player 2 receivedan amount equal lo four times the amount sent by Player I Player 2 then decidedwhether lo r€turn to Player I either $0 or half of the an Notc that this is the sameas the trust game discussedin the previous section, with tr I thepavoffs to Plaver 54,-r€ {S0,$2,$4},/:4,r:$0,andtre{0,l} Therefore' were: Player2, resp€ctively, r, = o,: 4 + (41- l)ir ( 1 k )4 - r . Nashequilibriumis As inother versionsof lhe trustgamqtheuniquesubgame-perfeci Player I to send$0 and for Player2 to reiurn $0 for any amount recejved'leaving with $4 and Player2 with $0.However,thjs equilib um outcomeis Pareto-dominatedby outcomein which Player I sends$4 and Player2 returnshalf, leavingboth plaverswith recruitedfrom a of 10 20 subjects in our exp€rimentconsisted Eachof the sessions of PittsburghAt and the Univ€rsitv Carnegie Mellon students at list of tribution subjectsweredividedinto two Foups (explainedin more beginningofthe session, below). Each subject then played the game twice, in the samerole, with two Cangrc ps b€ trulted? 59 subjects from tbe other group.Subjecrsdid nor know the idenrity of rhe other with whom they wereplaying the gam€. playof thegamg acrionsweremadeand recordedusinga choicesheet.At the of the game,Player 1 circled on the choic€ sheethow much he or shewanted to Player2- The sheetwasthencollected.the chojcerecorded,and the sheetwas a Player2. This Player2 thencircledhis orherchoiceof how muchro sendback | 1.5Thesheers werethencollecred,thechoicesrecorded,andthe sheetwasgiven Player1 who could obse e the ourcome of the game.players also had r;-cord on whichtheyrecordedwhat happenedin eachof the two qames. onl)diffe'ence betueen ther$o rrealmenrc \ er i.l ho$ rheg;oUps $ ercdelermrned thelabelsusedto refer to the two roles. lIn theControlcondition,subj€crswererandomlyassigned participantnunbersar lhebeginning of theexperiment. Theywereihen rotd tharoild pafi;ciDantnumbers corre.ponded ro rie foleot Ptale' | 'haLe\en parric,p;nrnumber,core,_ "nd pondedto the role of Player 2. Subsequenrly, the two roles were referred to as 'Player1'and 'Plaver 2'. In theGroupcondition,subjectswerealsoraDdomlyassigned participantnumbers, butthesewel€no1usedtodetermjnethercles.Insteaa, subjectswereasrcato mate a guess aboutthe numberof daysil wouldrain the foilowingyearinSanFrancisco. Amediansplirof thes€guesses wasihenusedtodividethesub.jects into two groups: HighGuessers and Low cuessers.High cuessersplayedtherole of playeri, white Low Guessersplayed the role of Player 2. Subsequently,all referenceto tte rwo roleswasmadeusingthe terms'High Guessers, and ,Low cuessers'. thatthisis a veryweakgroupmanipulation.Inonecondition.therclesaresimDlv redby a gue.. abour.omerhingunrclareLt lo rhr grme. lhere *r, no o,t.i betweenthe lwo trearments. ln both treatments, subjectswho werein the rote I wereseatedon one side of the room while subjectsin rhe role of ptaver 2 were ontheother Subjectswererisibletoeachorherduringtheexpeimenr,but did not with whomtheyweremarched.6 At rhe endof the experimeni,subjectscompleled u e s , i o r n a i rm e e d , u r i F gl h e i r g e n e m lp r o p e n s i t )r o l r u c t { R o l l e r i q b - r . Weconducrea I 'sescion5 r,ir in rheConrrotconiirron and.rr in rt-ecroup condir,on,. a lotal of 174CamegieMellon and Universityof pittsburghgraduareand unriei_ ,tLdenls{80;n Conrrolands4 in Croupr 5Jb ecl.sererecfuired tromd tarye ol porenr,dlly Inre.esred Dilicipdnr.vjarn e.nartarnouncencnr rharpro,rdedtrriie ion on the detailsof rhe experiment.The sessionswere conduct,"abetween 2000ard May 2001 main hypothesisis rhat the interacrionbetweenexperience (what happensin ihe round)and cxperimentalrrealmentaffectsthe amounrsentin the secondround by yerl. Specifically, rheprcsence of trusrin a coliectiveenrilyimpliesthat subjecrs in th; )upconditionwill be mol€ influencedby experience than subjecrsin the C;ntrol. We gmour analysisby exploringrhe aggregate data for otherpatternsof behaviorrelated thegroupmanipulation.T 6l HandbDakrl husl ft'\ur.h Table 3.1 prcscnlsrhe total .llnounts scn! b) sLrbjectsi. the role ol Plalcr I b)' condilioll Thc aggfegatcchoices b) subjccts do noL difel greatlr by condition. There rrre slightlv no.c Playef ls who seni $4 in the Corirol (an)percent) lhan 1ll the Cro'rp condilion (48 pcrccnr). but !his differeDccis not significanr. Moreo!c': .rhnosi i$rcc as nauv sub jecrsnr rhe GrorLpconclirion (12 pcrceni) thtn $ lhe Conlfol(18 percenr)nritiallJ-sent$2 ln lrc1. $,hile aboul lio percent ol subject! in Lhelole ol Plaler I irl both co ditlons scnl somc anronlrt o I nrore-v-in th c ln st rourd. n l.rrgerpfoporlion ,/ //rrr( 1r,l; ng sottt('!'t tr sent$.1ir the Control condiijon (25 of 32. 78 perceni) thai ir the Group condirion (22 of 37. 59 pcrceri). This dillercncc in anount scnl anong thosc $'ho sent mo ev rs marg'n' alLysignillcant in a Fisher Eltct Lcsr(p = 0 08) Hor'ever !his pattefD is rc\'ersed butis " t h c s e c o n dr o l n d n o t s i g D i l j c a n i \ { h c n $ c l o o k a t t h c c h o i c e s i D R o u n d 2 S p c c i f i c a l l )i n in !hc Controlcon \,,P,rrn(r'scnt 54 tlta\e sctllitlg ol:orrtor ol $e seeih:rLa smaller Pr (21 p'rceni) i Notc of 18. 8l condiiiot the GfouP (21 than ot 19. 79 Frcent) dition aho thal in bolh trcatrnents rhe frequencl of pla,versscrcling S0 incrcased bc[vccn Ror.ds I an.l 2. nnd thni ihis increasew.ls gr.ater in lhc Group cordilion (ffonl 2l 1(]'10 pefocnl) than in lnc Contfol condition (fio 10 Io 28 pcrccnt) Overall. among subiccts rn ihe rol. of ljlayer l. thefe arc slight diflercnccsin behavior bet$een thc L$'oconditions when looking at the rggregrie dat.r. In pafticular of thosc scnd;ng somc nlone), the drs tribuiions of amounts sent dife. b.Lseen thc trc.rrmentand conlfol condilions Table 1.2 repo|ts lh. beha\'ior of subiectsin thc role of Plavcr 2 b) conditior and round EtLcbcnlry iD thc Lablegives for each possible anounl sent wh'rl prDpofircn ol Playcr 2s reiurncd one-half ol lhe amounr received. rcsulting in an imprcvenlcnl iof Plal,cr I over thc initia l alloctlbn. I he r cmaining subjccls rll fel urncd S0, resultng in a 1'lttuI I hcttu!tuilsol untuu|l\slt'tlt b\: Plot)tt l Anonni sent $0 S2 S4 $0 $l S4 Rornd I 8(10!il 1(r8rn) t5 (6r,ti,) 10(21'r.1,) r5(llI) 22(1..1| ) RouDd l 1 1( 2 8 , t 1 6(l5li) : l 1 5 8 Ul t9 (.10,f,) 5(Il )1,1 2 l ( 1 9r ' l9 (24f) ll (r6r'i,) .+8(60'11) 29(l1':t) 20111r1,1 45r.13'f l 1/6( I l'rli) ltl21{52fl,) [/]9 (15fl) l/j (60,)r.) 12/2r(5r'ri,l t 5 / 2 3( 5 4 1 1 , ) 5/ll (iErl) l5/.1E(5211) 10/61(491,i, 6/10(30e1,1 2 l / 4 5( 5 1 r , ) 29t65(45"1i fitbk' I 2 P(ruitusu ol Plltlr ^ rct t ins hall b| oi.r sl s.1 Gro!p Torrl $2 S4 .lr- (57')i,) l v 2 5 ( 5 rt 1 ) ll/12151'.ti) l/ l5 (20'N ) ll/12 (50,t1,1 1.1/3r(l8 r/i,) Ca eloupx be bustett? 6I 2 received $0medn, rhercwd5 nosubsequen, choicc $,{affi'gge*1lit "1,.1fti.::;:llffilliyer *r#il##i[lffirtr* rualbehu o and n ut n t c,,ltccrtrcentit I :ffi:":Jff ' ,he oLrcome ::1".'',1":l"i:1.' ,s fit:rt,TI','"' $4,o. pia)cr j"fl i,.l:,,':*l,u*$iil't {litt:ti,,;,.'', iift i',.iii ffi j;;*illt*{::, jif luli:ii:.#,..:,]l,i,liirn"#i ; s,i+,;;;j: * *:1il:$:.:l* ff:tr3:til{:: [r **i,=L,, *' lli*in* ilgl-itr*+ ll**ff ',:'#:iT:rffi::**:*t,'t"n*xi#iittil,,sTf i*[l*i* ffi * 33 Ch.)i.esin Round2 br pta),er I contingentan autuomesin Round1 Roundi N/A S0/$8 l;4/$8 $0/$16 $8/$r6 -SerrtIn Conrrol Group $0 s (rlyo) 3 (8y") o loyl 3 (:8y,) 0 (0y,) 0 (0/,) 0 (0yt 7 (15rA 1 (2't) 2 (4't) 8 07"1) s2 Trust abused Tru$ horored fi.,ff $4 $0 s2 $4 $0 $2 $,1 $0 $2 $4 $0 $2 s4 r (\yl 3 (8ilo) 3 (8"/") 0 (!yl 9 (23%) 0 (0%) 2 (5"/r) | | (28oA 10 2 Gvl 2 (vl 0 (0%o) a rc%) 3 (6'r) 4 (:9'/,) 2@n 5 (11".o 0 (070) 0 (070) | (23'X) I 62 Handbaokol tn|st research Table3.1presents, for all possibl€outcomes of Round1,thesubsequent Round2 choices of subjectsin the role of Player1 in eachcondition.The fiIst two columnsin the table presenlthepossibleoutcomesin the lirst round,Thenextcolumnclassilies theseoutcomes into threepossible categories frcm PlayerI's point of view:no iDformation(if $0 wassent and no action of Player 2 was obs€rved),trust abused(if either $2 or $4 was sent and $0 wasretumed), andtrusthonored(if either$2 orMwas sentandone-halfof themultipli€d amountwasrclumed).The fourth columnprcsentsthe possibleamountssenlin Round2 by a Player 1, and the lasi two columnsgive the number of subjectsin eachcondition who sentthat amount after obseffing the outcomedescribedin the first threecolumns. The resulis in the table revealgreatersensitivity to prior outcomesin the croup condi" tion than in tle Control condition. For instance,of those subjectsin the role of Player I who sent$4 in Round I and receivedback $0 (i.e.trust wasabused),9 of 12 subjects(75 percent)in the Contrcl condition again sent $4. In the Group trcaunenl, however,only 5 of l1 suchsubjects(45 percent)againsent$4. Similarly,of the subjectswho sent$4 in RoundI and received $8 back (i.e.trustwashonored),all of the 11subjectsin the croup conditionagainsent$4,but a smallerftaction(9 of 11;85 percent)did so in the Control group. Howevet neither of thesediflerencesalone is significant in a Fisher Exact test. Still, theseresultssuggesta greatersensitivity to first-round rcsults on the part of subjects in the crcup conditionthan the Control condition. A direct test of our hypothesisinvolves looking at how subjectsin the role of Player 1 reacl when their initial trust is either abLrsedor honored, To demonstratethe existenceof trust in a collectiveentity,we needto showthat subjectsin the croup conditionwhose rrusris abu'ed(honored) in RoundI arelikel)ro sendlessrmo'e)in Round2, hansubjectsin the Controlconditionwhosetrustis abused(honored).Table3.4presentsthe relevantresult$ Specifically,the Round 2 choicesof subjectsin the role of Player I arc given, by conditionand outcomein Round 1. UsingTable3.4,we can seewhetherbehaviorin the two conditions differs in the way we predicted, and in a way consistentwiih subjects Table3.4 Choicesof Plawt I i Round2 b, Round 1 outcomesand condition Trur! honoredin Round I Round2 $0 $2 $4 Total Group 0 (07") 3087") t4$2n t'7 0 (0v") 0 (07") l4(1007") Total 0 3 28 3l Trustabusedin Round 1 Round2 $0 $2 $4 Total Group 6GIn 0 (07") 9 (60"/") t5 t2 (52v1 4 (r1%) 7Gon 23 Total 18 t6 3E Cangnups be trusted! 63 trustin a collectiveenlity.evenwith theminjnal lorm of groupscreatedin our iop part of Table3.4 indicates,in lhe Group condilion, all 14 subjects(100 sent$4,whilein the Control 14of l7 subwhosetruslwashonoredsubsequently percent) did so and the other3 only sent$2 (18 percent).wlile the direclionof thai subjectsin ihe Group conditionwhoselrust is honoredareslighily deviationsby with our hypoihesis, to send$4 in the nextround is consisteDt ectsis insuficient to produce a significant differenc€. canbe foundln ihe andmor€conpelljng,dlrectsupportfor our hypothesis in the roleof PlayerI parlof Table3.4.Here,weexplorethe behaviorof subjects theiilrustabusedin thefirstround(theysentsomeamouniofmoneyandrecelved in lhe patternof choices beiweenthetwo conditions ). Thereis a cleardiiTer€nce (60percent)whosetrusl wasabusedstill sent$4in the Control,a majorityof subjects did so,anda In tle Groupcondition,howevetonly 30percentofsuchsubjects thedistributions ol actions (52percent) between sentS0.Thedifference ityof subjects at ihe p<0.1 levelin a chi-squaretesl (X12)=4.78).'y twoconditionsis signiRcant of trust wiih ourhypothesis in behaviorconsisteni djflerence weseea significant in theGroupconditionwhosetruslis abusedin RoundI were entity:subjects in Round2 than lhosein the Control.ru morelikelyto rcactnegalively analysisto determinethe elTeclof usingregression canalsoexploreour hypothesis weusedorderedloglr on behaviorin thesecondround.Specifically, experience to explore how the amount sent in Round 2 is affect€d by the expcrimental variable.Round t history.and an intemctionbeiw€entreatmentand history" resultsof this estimationarc reportedin Table3.5.''zThe first threeindependent 3.5 O iercd logit rcgtessionof atnauntsenttu Round2 (ll -2.670'' (0.696) 0.266 (0.576) (Rd l) abused 0.644* (0.395) -0.533 (0.432) E7 -81.76 0.027 (1), (2) (0.729) -0.1l5 (0.598) - 1.518" (0.827) 0.955 (1.21r) 1.901' (1.385) 0.154 (0.579) 0.141 (0.630) 69 4E.88 0.185 48.83 0.186 Standaderos aie in parentncses. 'Valueof oheobseruatioD vlriablc chaDsed of dependent Ge note I 2) l p < 0 . t i + * p < 0 0 5 j . r * ! < 0 . 0 l i a 1o1n e - t a i l e d . 69 -50.55 0.182 (5)" Ll50' (0.884) 1.055 (1.221) -2.206' 1r.422) 0.419 (0.565) 0.594 (0.624) 69 ,19.89 0.192 64 lluntlha.L ol trusr tcscurth ldrjablcs are bir.r|)- \'rriablc! indicaling whethef tflrst $as abuscdi ltound l. whcltcr thc liccl $as in the Crou! condiliou. alld the irleruclion bclween the nvo. To tcst fobu\tDcss.$e .rlso lnclL e a gcndcr dunrlny r.rfiable and a condrucl iion qnestionnrirc f e s p o l ] s cm : Jc a s u r i r ga n i n d i r d u x l \ g c n c r a lp f o p e n s i t t1 o l f u s t . fcsults indicate,if trust \\'rL!nbtrscd.strbjectssenrsig licnn!1,"lcsc than if irwas As tbc llowc!cr the regative efle!t ol Lrust bcing abusedon unloun! scnl iD lhe subsequent not. is.ve| stfonger lin strbrccrsnr the Group cordjlio. (al lcasl 1$ice as big). Thc rcund coclicientortheinterucrionLernr(p.-:0.09lnmodel,1andf':0.06inmodel5.onclrLilcd) is starislicallysigniiicxrt providnlg furrher support ld ouf hytoLhcsis. Cotrclusion The abolc cxircfrnent .rnd .lnal)sis rivcal elidence of trusi nr a coll.cli!c elrllty Subjects m lhc Croup condition show.L grcalcr rcrction to prc\'ious expcrcncc. parliculafll rvhen Lhiscxt.rience is negtrti\,e.\vhiic rhc cllccl is nol small, it js only {cakly slxlislicall,! signillcanl. This is probabl] duc lo sdveralfeaturesof ouf f.sca.ch d.sign. first. ereDthough $e used 174subjeclsin thc cxpcrnnents,the rnalysis lbcuscsolr o|1) ihose sxbjectsm lhc role of Phyer 1. reducing our sanple size b) one-haU:Thc srmtlc size is flrfiher feduced sincewe arc interestedin !hos. subiects$4ro had eithcr a positi!c or neg.rrile erpeleDc, ii Lh. 1ls1 found. elinrrntnrg !hosc '!ho senl S0 ir rhe first round. Whilc usirg deception would hale allowed Lrsto coll.ct much noi: daIa, $e feLidral i! wns inrporrant 1(]lely or a silualion $'hefe subjecis\\'cfc acltrally rralched whh two olhcr pcoplc in rlre fooln and r n r si v a sr f a n s p r f e n r . A secondreason lin nor obsefling a lafgef eficct mr,"' halc Lo do $'i1h the subtlet) oi oxf Gfoup treatmcn!. In our cxpefitnent. tflrsl ir a collcctivc cntily is bllsed solely on.rn i n d n i d x a l : l i l n i t e d c x p c r i . n c c\ { i r h r n e r n b e r so f a n o D i . r l g r o u p . B y c o n t r a s t .u a n orgarizariolr I ciuter ! indi\iduals lypicall) hrve fepeatedc\pcricncc \ri1h long-srandxrg groupc tb at stfongly infi ucncc th.ir ne1llbe|s lives.ln such cn cum slances.it is felsorable 1.) cxpecl unifofmii) i. bch^ll{n b) group rnetnbers.In our cxpcrinrcnls, holteler the ' g r o u p $ r s m n d o m l yd . L c f n i n c c b s l ra n i r f e l e t l a e d i a ns p l i t o f i n d i v i d u a l sr . s P o n s e 1 vant r nd tfivir I grLcssTh crcfolc. i1is striking ihai \!e obscrvcdd,r' c1l.ct wirh sucha slighI gfoup identir) mrnipulallon and we uo ld erpccl xn c\cn l.trgcreH-ectin sitlrationsrvhcrc the group or org.tnirational ideriity is srrongcr. T h e r c s u l L s . r c l c n n o r e c o m p e l l i n gw h e no n ec o n t i d c r sL h . rol u f g f o u p i d e n t i $ m a n i t ularior also likcly crcrrcd .rn ou1-gronp bir s.which would clc! rl) '!ork .rg.rmst our hypothesis Individuah tcnd ro !jc$ oot'gfoups as lesscoopcrrli!o. honcn. ard rfustwofthy. and terd to eripecllcls posilirc bcl avior ionr o Lrt-gro Lrp nlenbct! ( Br.\!cf I t)79) ConseqI entll subjecl! intcucrin-s with counlefprtu c tegofiTedas m..rbcrs ol .|r oul'groLrp \rould be biascd toward lic$mg theif cou|ierpats l].\ untruslllorLhl. Therelbrc. $,e expeci that h u l i . g l , j c c l \ i l l f i e G r o u p c o r d i l i o n j f t c r a c ! r i L h l w o n e n b e f s o f t h e s a m eg r o u f l v j t h o u !i ! b c i . g a c o n n t e pl r f t t o t h e i ro $ n g r c u f m i g h l f m d u c e m o f e s n i k i n g r e s d l ! . Thcsc linitalbns nol\rilhstandir!. \\c bcliclc !111 this study nrkes r nLrmberof i m p o r t a . t c o n t r i b u l i o r qt o f e s e r L f cohn t f u s l i n t h c c c o n o n i c s .s t f a t e g yl n d o f g a n l z a r i o r a l l i t c f r t u r . s .N i o s l i r n p o n a n t l y .t h e f e l l l l t so l o l n . x F r i m . n l r e i r f o r c e . . r n d! i l i d x t e ir a morc crrclirllr- corlfolle,:l setring.ihe iirdlng bI Zahccr cLal. (1993)th.rt rrnst in indi l i d u x l s a n . l 1 )u 1 1i r c o l l e c l i l ee n t i t i e su r c r c l . L t c b d u t d i s t i i c t . T h i s s u g g e s trso t i u l y t h a t i L i s m . a n i r g f ' r i t o c o n c e p r u a l i zteh c p l a c i n go 1 l r ' u s ri r a c o l l e c l i v ee r t i r ) , .b u t a l s o t h a L Fur (Kr ligh ind glv I fut pr( ri1 iu dl si \,i at S Cnngtuupsbe turte.l? 65 lrustmayinfluenceeconomicaclivityoverandabove individualtrusr.Consequentiy, tnportantto carejullyconsiderwhjch levelof uarysrs ls nosr relevantwhen the- abouttheroteof rrustin theorganizarion andcoordin"r;o".f ."ono.i"-o"ilu]iy. tn a co ectivcenriryhasa oasrsln srouprdentification ::T:g1i:i,lh:] et al. 1996)is essenrial. "i:i figfi::i:l"il#* lilffi:ffii'ffi.lr,jlll; li!ffi.:ifi:"", ";":if;t tru$in collective enriries. Theevidence reporred he* ir."^;."* *;ii ifr" ia"",fr"i 'n a colectjviryas a heu.ir,i"e., a"ell1li"i,rg,r," ou.i_ to**^T1i:lu*"1't iness ofmembers wirhwho-trr"yrru".n" p,i.. rn..","ir"., I rs stdking becauseit suggeststhat the;flects of an ;itial "i",rii,",*lfi,i *p.'.i*""-*iifr'l rcpresentalive of a couecriviry exrend beyond ,rr" ."r"it"""ir"',"'_i".."iii'rl Newrcdrionshio' *a;.,".""1""" *i''r' p.""ll :::::::.::1'::l*"":riectivitv unknolvnmembersof a collectivirydo not start fio. ;;;;;;;;;;;"':;;_ the lensof sharedgroup idenrirywjrh trr*" *i f, *fr". i""i". ^through p-.;or : il,ii!?"id;TftiJ;Ji:'""*:ril:*fi'il?t,,T,:JJt" we areable to broadenthe applicationof the lrusr game to a wider and more th".^re^more closelyreiatea ro acruareconomic orsarizarjons ,..::,,:l l::1:-,:." a.".'' iJ"'il"i'J,i*:j:: :j:f: fi#;il,!il;,;i,v,,1 "r".."'"i*i' ffi1T1,"",' Whilethissrudyadvances our 'nderstandingof the ..fationsfript"tr"e"rriru"r in inai ly'.::j":.:t: research.In :.lg* enriries, it arso ra-is€s an"-t* oi ii.,p_,u'tqu",io.',io. understandingthe condilions tf,^i **f".it", . Ine process.particular, throughwhich trust rransfersbetweeninaiviauats "G-". ana coitectiviries tsa fruitful areaof inquiry.Forinstance,in ar organrzarronal context,do cerlain alrerthedesree towhichindi;iduai;;;t :*:::::::1.1T:ll,ll:,.fundamentaly :iti,llj.llilil+iiiu';f;1r::,'itffJfi ::i:.r;ilff ;"'*,;,j;::,'},.,: 'tv",, rcpresents a usefuland e|lcient heuristicverlusan enoneousand costlybias_To the can-be idenrin.a, *" **ra i" e,ln :'..:umstances ll,::: _*:::j:,T_"T.ll "i* asabasis *-,0 identity fort'u;i;;;.* ;;;;""*J;';H,"."1; #lr,lJJ::;X"'n* idei,hxr..u5,inI co ecn\eenrj,yr. re,Jred ro,bur 1"":ll.^I. :..:*:l ",lporr.rhe oi,;;i;;i;;;,r,;li;:;;;r,:i:,ii#: 3:::::,::T;,j1:l l"it1i,i.r,,;a,,r,.''u.,. sj,e,,, w,h'he\ ic$,h.,r e.onomic a.or. de;.;;;;;;;,,;;;; on il: ;l-,:i#il]- with t s r \ conoucled co uucreow n .jndividuar n ,, _ . - , . . . . , - . u qlased a v v i i ! \ ! , ,exchanges J members of :is.::.::ll.:ll::ljl:f. ( o r r e c ' r \ r l l)h r r l r u \ r i n l h e c o l l e c l i r e c n r i t ) r r h . n s e r \ e s d r heuistic dh for qd.ril, sh(re pfior hi.roly or knouledge if memU"^ "f the trust in indi,f,. *fr".,i,,,y i. f,rn,,j-o, Acknowl€dg€menrs Wewouldlike to rhank Robin Dawesand parricipanrs in rhe Org4nizationatBehavior andTheorysemin"j\eles ar ( n,nes,eVilon Urrrer,irl ,1. iooiti.".rn," science A.\o,idlion'lleetrng. ""a ", tor u.erutcomjnenls on earlef vcf,ionsof tli. cnapre..' 66 I L Handhook oJ tru$ tu\tdtLh F o ri n n l . r . . 9 ! . n l s l i s o . i . L o - s! !. c C r . r o , e l 1 . (r 1 9 8 5 ) r n dM n 0 r u i e (r L r 6 l ) irr 1lt .bi.s .f ! un. lk rlo nol con$dc. dlllrctr..s in drc oignr ol Whil! \e n.Ln.$l.d!. drllcrcnccs i l . c i n r! lu s t i D( . . ! g r . t r p s o . o r l N i l z d . n s t r r { i n g l i n { l i r t r r l s o i L i t r s sL f. c . i l i c r l] . . o l L . c t i vccn t i r i eD orher.oll..tir. c.(iri.\ r be!o.d rh. icopc ol this chnrler (lo' r lh.rghiful di\cu$r.n fl ar i$uc s.c , c s . x f . hb r a r n l l . r d ' f k N i a h ! p l . f ! : l ( h r \ ! o l L r n el !:0 1 ) l l o w c v c l r h e $ e r x g d , t t r r i s i o r s c n d n g S 5 r n a $ l l ) r . , c 5 1 l r r n { l S l 0 . l 0 . r . ! | e c l r ! . l r _ B . , g ci +t rul c L h d1 h .h i e h crf c l u r n ls( l L e ! eL \ Nr t l r u . 6 D l x tr c d . c sl o c r n l r u r ' s . . n . . , i i D -b! c h r L o rt o q . r d s Fr ) e s w h . s c n lh r l l o r L h e e n r r tr.c$ L l t c x n u L n t . A p h r r b l e l i t ! n c t r t i . D o l t l n s! r a r p e l e . r i s t l [ l ! u s t i n ! b c h n l i o r i s n o n d l ' \ . . n r t h c \ . n \ c r h l l i t i s p ! r l . r s d i t r t h x t i s r i i i n c d [ 1 h r . r J r . r n f . n t x ] s i t u ! r i o n .rl ln b l l n g b e h d i . rs p r i . r c a . r l e i l l b e t i l h e r nr.ns t !. 10tb..l).cL oi 1,!\r. h. it r stc.i6c rurqr ol n grorl .nrbcr lhon I n t h . c v c r rr l r r l f l r y c ' h r d s . n t $ t l l ' l a v c . l d r o l f r e d l . m x k . ! . h o i . . .L r r lr . s l r l l. . . L u r i ! d rocirclc N.hdcu od th. sh!.t !r it rorlf not Lrcrpfireil tr[o hxd tuccLr.d$| lioni Llen lai]urci. cnaL rn.l 160(r0lxDd|onr n hrse Si.ccrve'r.rrn!d n.m.1o lr.se u.ireriLrdsil.liLstudcnl popuLrlron\li1)1r| l i s r . f t o i . D t i i ls u b t c c lisn., \ r t r n l . i t r n t s d i d n o t k n o r e r c h . L h s A m . . ! d r c f c * t h r ( n D F c . r e d l o r ! r osnizcsor.onc in rhe'r.ni. it lrxs 1.r! rnlLk.l.yLhnrrhe! \$Dld b. n rchcf sLlh LLefe.ui rIcl. hnc{ The gcf(l.r ..ntosilion dni noLairle. isnili.rntl! b.trr.ct thc ConLirl (.r! !e,..nr f.DrxL.l!ml Croup ( r 9 t c r . . n l f c D t l c ) c o n a r l r f NN l . r c . v . r . d r c r . . r c n o ! e n d e r ( l i l i , . n c . s i n h . w i n u c h t h e J n \ L F l r y e r s c t r l t o t h cs . c o n . l p l . r _i er irR . t r D dI l h . r c l o r cs. e o f r l l u n I e r d D r l r s n . i g c n { l c r Tb..hlns. n l trghrrb.ut b! an Ncrexscln thc (nouf c.ndLlionol areproroili.d .l tLDscscn{liir! n o n e f l l r d : . n d S l l n a r c a . n l r o l . o n r l l l l o n t | . f r o t . f t i d l o l l h o l c s e n d n i g. n . y l h r t s . n d S l r n r i n s 1.{.f I r I r I corri.sencJulJl.! o L.ok lor ori hypotheri/ed..lr \I. D xh. urc Goodnrrn\ (196.1) rnnnhrDLrc.rcer.ntuunl iftr iD R.rDd :. hisroir rna c.niltllt Lookln! otl! n( derniorj 1. leDd54 r c i ! r ! I $ n r l l c rr n h t r r t l D t h . i c . o n dr o ! f d ( u i r i r hl s n r l u r x l! i r c n l b . n e x r5 0 j 1 )r l n n o f l i s t r o u n d !hort!str\i|!{r.h.!tceori.9.\!efirllhrlu.ltrrcctrh.nrllhr_!oLhesi\xtr':()llhGisc!.DrlroLgh $c.hrDgc oic vlhLeol 0 L. I ir o'dcr i. pcifo.n lbtr re{..1,kni! Lhc{.sl nro.cco.ser!.r've Our r.$lL5 \r!!e{ in xffrrnt liJ_nnnelrrin Lhrl 1lr.r !!c {rone.r $hen Lntrrn rlrhcd thdi whor 11is hnro.r(l.itrai.xtltrethrlrofnnltrll5n,tr),.r.tto.ollc.hrc.n1rlresnnt!rlorgly$hctrrnrcmb.r!dtrr!s llicii trrrt llo$cvci: tlrer rr! ii l.r{ 11..thcr fo*rblc erPhnill.ii lor {Lclrrn xs!nnne.I Firn. rl'n.st .\tr!onc rho LntrLstu rh! nrt rofnd rnd htrsLhenlrun |onorcd. lrir lgri. u the !!!ord round i . r. t s i r t h c C r o r ! T h o c l n i t . \ h i l e 1 r ] e , . . r q L . x d i l r . r c . . . i i r L h e p o l 1 e . s i l ! t o t u r t r R o u . d l b e t L r er e x . d C o n L r . l . . n ( l i n r D s $ c n r i - ! h r n o l o b v r ! e l r l d l l i c { d x t a r l u c l o s u c h r 'g. cc ,l T l ..fS.cond.qorkon L $ 5x r s . n r r ( . ! ( r h D c n n x r a T \ e f r L r l 9 i 9 l i n d i c l t c i r h r L o u l c o n r d i r I r l l x l l h c l o $ r r . l i u 0 e l e v e l .r ! nlorc\!cigh1artrntho\c llhl c{r..d it liolLoworll o.r th$. oi. nrlehtc\n.ct tlul l u.s lrud ibNd lxndo in!up\rLhr'l.s)nriehlhxv.rir!.!erellltr1r[ihainsnhonor.{]lrndendirrlufritirr.errnl. 11. T h . r e i u l r sr r . s t r b s t a n t n cul .yr h . r g ! d l l { . u s c . r d i l l r r l c l n s q u r e sr n { r x d . l . r d . r . d l o - ! n rr.r..cnl\rho hrd (iun hofo,t(liri R.uDd I scnlS'lii Rorfd I (sdcTxhl. \ll ll blcclsur (hcCroLLlr l 4 l . T h c r e J o i cb.e h r \ l . r i n t h n c c L li s p e r l c c L lnr l e . t l n . d l n t h c s c c o n dr e g r e $ l . nl n h b l . l 5 Consequerr\'.u..nrDg.don.srchobserrtrtl.ruSllnorl.ilocordrcllhEc{nnxliorsI.rthcfotrrh .nl lililr.rdck ir'l!blc I5 This.lrarg.ronsrernrtotrrhypolh6is..rdknr!tb.rcnrhrnrorecof5i s ecorlf0hrigt lr r a l n ' . l h c r . i h r l b r t h el o u , l hr n o d . lI . . l ! c l l r r h er l r t e r o r i . r - . l d ] c l ' 1 ] a l u c w ..ltrnm j. trc iepon 1l,erejtrlrsol thc F!rc*ion uirs Lh'!lrxt!. dlxl pFrfuccf the LrenJi1(liLgliesli]g_ Likclihoofr Hore\ci. rlr. subiLmtircr.!r 1s.r un.In.g!d nrr anr' 01 lhe 11po$,ble .rDng.s (i.. the cocliicienLiin t|. lirl nnd rlnRl indeferd.il \xrixbl.s irc ll$rrs sst,lic..r ar | : 01. {hilc the roe ll.l.rs lnf I r..lhci auceiffeFerd.rl l'rrixblc\!rc t.!.r s(11r!Li.,llts gnin.rDtl A,D{. K lltltl.7r.lrrlti rl .)l..j",i:rri,. \.\r lnrk: )!or L,'r . c.i!risLrL,stindtrrn$or{buesr.\rorLnrgfrf.' A n u x f .N . . l B o h n e L n r d Nl ' i r n ] ( . \(' 2 0 0 5 rM Bnchmun. R ir01)r). litrst. to{.i 0l .of(rol li rii oiirnizllr.nll rehlrtrt. a)E.t atn t St t.\,22, Ii 6i. Brclnrrrd. R (li0:l). Thc.ooidnrNrioi ni i!l!tioDs ncrossoi-qrrr/.1L.rdl1.tr0d!ri.f rr.nnrn,ttl thktia rl vttut:oNr! & Ot:'tr 1ttr,1.33.1 2l rdlrnlre.. Brflrcl JB l \4 H llrnscn ll9t5l. Titrs($onhnrcrsxs x s.urcc ol conrpelrLrre 15lsp.c listre). l?5 9ll ,llnqtrrrt.hntn!1. 8.,-L, l l DictlaLl xrf K \I.Cxb. (l9Ll5). turl. Ec,lrjo.rll. r.d r..id histor! . .;rrtr {n, C Can gtoupsbe nuskd? 67 lL. md R.G Ecdes(1989),'Price,autho y, and trust Fron id€allypesro plunl lorms, ,{,,dl af Sociolasr,15.97 |1a. M.B.(1979),'lngroup biasnr thc minimal inre.groupsiiLration: A cognitive-noiivatio.alanatysis,. alaEicalBuIe 1in, 86, 301t4. leJ,l. andL.L. Cummings(1995),Trunsaction costsin organizations with hus! , in R. Bies.B. ShcDpard R Lewi,l,lre*'E-,.' 1..-\"" t.a.@i O.L-\. /j"r..urccnir ' (1 Jqt oF". -Swit N,R. CrcsonandR. Dawcs(2002), n€ishbonand persisrent stHnseN:A cro$ cutturalinlesn ol tusr and @iprocity in soci^\ cxch^nC.', An{i.an Jowtdl ,/,t .iolog}, 108(D, 168 206. N,,R. CtusonandE.Johnson(inpEst. Trusl and reciprocity: An intcmationalexperinenl.,Jo,/,u1 Bthatun and Oryani.a1i.h )i.R.(1977),'Trusrasaconplexnulti-dinensionalconstruca,pslch.logitulRepa s,4r'D,15 30. S.C.and A. C. Inkpen (2002),A mullil evelappfoach to rus t in j ainr \enrates' , Journdt aJ Intethati. "al \ Aaearch,33(.3).419 95. A. \1994).ThecaryquenIs aI nr'rderdry,stmrord, CAiSta.ford Unilesity prcss rftA. (1964),Sinplemethodsforanalyzingrlnee-faciorinieractioninconlingcncyrablet,.r,!rdl AMi.a SlatitticalAssatiation,59, p 45 'Econonic &lion md social , M. (1985). slructure The prcblcm of enbeddednesJ. ,,1relr.ar aalaf s0(ialqy, gr(J), 181 510. 'Cooperation W, P Ockcnfeh (1997). andM. Wendel basedon irusr:An experinenial invesrigation,. \ol al Econot,ic Ps!.h.lag), 1A, 1541 c. (1984).An enpirical invstisaiio. o I : o n c re, dcr,.o orpod rlh n a nd(er ng !h110eij "r oI Mn,I?hr R?karch.2l.278 a9 D andA. Tv{sb' ( 1979),Prcspectthcory:An analysisof decisio.sunderdsk , t ,,.t,?, /ta, 4?. R.M , M.B. Brcwerand B.A. Hanna( 1996),Collectivehusl andcollectilcacrion:Thedecisionto trrsr 0 s@iald@ision, in R.M. Krame. and T.R. Tyle. (edt. ]|)rrI ih Orl<antdtk^t: ftortie\ ol Thearydd Thou{andOrl\ CA. Sase. J.D.andA.l Wcigerl( 1985),Trusl associalEality',S,.'nl a,/..r. 63(,1), 967 85. $n. N. 1.1919),Trust dn.l P.\r?t, Chicheste.: Wilet. S.(l963). Non{ontracrualrclationsi. busine$'.helrd, Sr. iolacnat Retiev,2A,55 67. R.C.,lH. Davisand F.D. Schooman(1995),An iniegralivemodetof organiarionalrrust,,4.ude,,! Mahagenldt Rerietr. 20, 1@ 34, 1.. V Perrcneand A. Zahcer(2003),Trust as an organizirgpincipte. Orsdhi.ationSid.e,14, ll,WW (1990),'Neilh* narkel nof hienrchy:Neiwort lbrms of organizarion., in L.L. 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McEvilyandV Perone(1998),Docstlusl oatler?ExplorinerheelTersof inLerorsanizational andDterpe6onaltrust on pcformarce', Otsani.alianS.ieh.e,9l2),\4t 59. akeaL.C. (1986),'Produclionofrrust: Institutionalsources of economicsftucture'.in L.L. Cunninasand B N r \ . J * ' < J ' . & , " , , , . r t O . 8 . " , - n . t u r aBt, t u t n . O r e . r { ( n , . ' l l q l P m . \ n t 8 ) J t t i