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Defining Trust Using Expected Utility Theory

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  • Arai, Kazuhiro

Abstract

Trust has been discussed in many social sciences including economics, psychology, and sociology. However, there is no widely accepted definition of trust. Inparticular, there is no definition that can be used for economic analysis. This paper regards trust as expectation and defines it using expected utility theory together with concepts such as betrayal premium. In doing so, it rejects the widely accepted black-and-white view that (un) trustworthy people are always (un)trustworthy. This paper also discusses various determinants and properties of trust on the basis of the idea that trust is not simply a matter of intention.

Suggested Citation

  • Arai, Kazuhiro, 2009. "Defining Trust Using Expected Utility Theory," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 50(2), pages 99-118, December.
    • Handle: RePEc:hit:hitjec:v:50:y:2009:i:2:p:99-118
    DOI: 10.15057/18045
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    References listed on IDEAS

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    1. Kenneth A Frank & Yun-Jia Lo & G Geoffrey Booth & Juha-Pekka Kallunki, 2019. "The market dynamics of socially embedded trading," Rationality and Society, , vol. 31(2), pages 152-181, May.

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    More about this item

    Keywords

    Definitions of Trust; Distrust Premium; Betrayal Premium; Properties of Trust; Expected Utility Theory;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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