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On the Reliability of Trusting

Author

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  • Harvey S. James Jr.

    (Agribusiness Research Institute, Social Sciences Unit, University of Missouri-Columbia, 124 Mumford Hall, Columbia, MO 65211-6200, USA hjames@missouri.edu)

Abstract

This article presents a model of trust in which a Principal chooses either to trust or monitor an Agent who, in turn, chooses either to honor or exploit that trust. The Principal's decision of whether to trust or monitor is based on the relative temptation an Agent faces to exploit the Principal's trust, which comprises two elements - the environmental incentives the Agent faces and the personal characteristics of the Agent. The model is used to develop a reliability condition that the Principal uses to assess the likelihood that trust placed in an Agent will be honored.

Suggested Citation

  • Harvey S. James Jr., 2002. "On the Reliability of Trusting," Rationality and Society, , vol. 14(2), pages 229-256, May.
    • Handle: RePEc:sae:ratsoc:v:14:y:2002:i:2:p:229-256
    DOI: 10.1177/1043463102014002004
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    References listed on IDEAS

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    Cited by:

    1. Renner, Elke & Tyran, Jean-Robert, 2004. "Price rigidity in customer markets," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 575-593, December.
    2. Lijun Angelia Chen & Bruno Varella Miranda & Joe L. Parcell & Chao Chen, 2019. "The foundations of institutional-based trust in farmers’ markets," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 36(3), pages 395-410, September.
    3. Harvey S. James & Michael E. Sykuta, 2005. "Property Right and Organizational Characteristics of Producer‐owned Firms and Organizational Trust," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(4), pages 545-580, December.
    4. Harvey S. James, 2003. "The effect of trust on public support for biotechnology: Evidence from the U.S. Biotechnology Study, 1997-1998," Agribusiness, John Wiley & Sons, Ltd., vol. 19(2), pages 155-168.
    5. James, Harvey S., Jr. & Henrickson, Mary K., 2007. "Perceived Economic Pressures and Farmer Ethics," Working Papers 7361, University of Missouri Columbia, Department of Agricultural Economics.
    6. James, Harvey S., Jr., 2002. "Finding Solutions To Ethical Problems In Agriculture," Working Papers 26046, University of Missouri Columbia, Department of Agricultural Economics.
    7. Eva Ebenhöh & Claudia Pahl-Wostl, 2008. "Agent Behavior Between Maximization and Cooperation," Rationality and Society, , vol. 20(2), pages 227-252, May.
    8. Harvey S. James Jr. & Michael E. Sykuta, 2006. "Farmer trust in producer- and investor-owned firms: Evidence from Missouri corn and soybean producers," Agribusiness, John Wiley & Sons, Ltd., vol. 22(1), pages 135-153.

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    More about this item

    Keywords

    monitoring; moral hazard; Principal-Agent relationship; transaction costs; trust; trustworthiness;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers

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