People respond to trust risks by reducing reliance on agents, at great cost.

Evidence

Principals cope with these potential risks and uncertainties in a number of ways. Some avoid or limit their participation in agency relationships. A proverbial few keep their money in mattresses-, literally and figuratively-fearful of futures transactions and cautious about transforming their tangible property into a symbolic share of collectivized wealth. Some forgo the benefits of a rich division of labor, delegating little responsibility or property to others and becoming jacks-of-all-trades. Others develop selected expertise to reduce their reliance on agents-becoming lay doctors, mechanics, financial planners, “jailhouse lawyers,” and art experts (Molino 1984)-or, at least, seek out second opinions. Large corporations acquire the expertise of formerly independent agents by buying them out and merging them into the corporation as a subsidiary (Stinchcombe 1986); vulnerable economic transactions are internalized within hierarchically organized firms rather than performed by market processes across these firms (Williamson 1975). But forgoing these agency relationships considerably constrains efficiency, affordability, richness of experience, and protection from risk. Carried to an extreme, it produces paralysis. — Shapiro, Susan P., The Social Control of Impersonal Trust, 35

Categorization

• SEED: Could anchor an essay on the modern equivalents — financial self-sufficiency movements, DIY everything, no-bank/off-grid lifestyles — as contemporary ‘mattress’ strategies against agency trust failure.
• QUESTION: Worth chasing: how do these coping strategies (self-reliance, internalization, expertise) map onto how people today navigate AI agents and algorithmic advisors?
• XREF: connects to: Client firms deliberately engineer competition to reduce their reliance on trust.

Related

• Principals mitigate distrust by hoarding wealth, self-sufficiency, or acquiring expertise. (similarity 0.84)
• Impersonal trust emerges where face-to-face control mechanisms are unavailable (similarity 0.81)
• Collective agency shifts trust from persons to future-dated impersonal systems (similarity 0.80)
• Personal trust fails where trust must cross corporate intermediaries. (similarity 0.78)

Broader Connections

• Client firms deliberately engineer competition to reduce their reliance on trust. #exemplifies (0.85)