Personal trust shifts the odds in the trustor’s favour by incentivizing good behavior

Evidence

To make an overture of trust in such circumstances, then, is to provide the trustee with an incentive to do the very thing which the trustor is relying on them to do. It is a sort of bootstraps operation, wherein the trustor takes a risk and, by the very fact of taking that risk, shifts the odds in their own favour. As Hegel spoke of the cunning of reason, so we can speak here of the cunning of trust. The act of personal trust is an investment by the trustor which will pay dividends only in the event that the trustee behaves appropriately, and like any investment it will have a risky side. But it is not as risky as it may at first seem. In the very act whereby the trustor is put at risk, the trustee is given a motive not to let that risk materialize. The trustor can bank on the fact that, if the trustee does let the risk materialize, there will be a loss on both sides. The trustor will suffer the cost of the reliance, it is true. But equally the trustee will suffer the loss of the trustor’s good opinion, and the cost of gaining a bad reputation among those who know of what has happened. — Philip Pettit, Republicanism, 1204

Categorization

• DEFINE: The ‘cunning of trust’ concept parallels reputation-based enforcement theories seen in the diamond bourse and champagne fair material.
• XREF: Connects directly to the Milgrom reputation-system and diamond-bourse material already in the knowledge base on extralegal trust enforcement. — connects to: Risky personal trust overtures presuppose and expand the trustor’s freedom — Philip Pettit, Republicanism: A Theory of Freedom and…, 1301; Situation-specific incentives override a person’s overall disposition in trust decisions — Diego Gambetta, Trust - Making and Breaking Cooperative…, 817; Trust reduces to anticipating the trusted’s incentives toward us — Russell Hardin, Trust and Trustworthiness, 370 (+6 more)

Broader Connections

• Acting trustingly toward others can itself induce their trustworthiness #corroborates (0.85)
• Reputational incentives, not only reciprocity, make thick relationships foster trust #expands (0.80) — Russell Hardin, Trust and Trustworthiness, 143
• Personal trust forms sequentially through a process of mutual selection. #expands (0.80) — Niklas Luhmann, Trust and Power, 194
• Reciprocal trust creates mutual incentives for trustworthiness #expands (0.78) — Nicolas Baumard, A mutualistic approach to morality, 166
• Situation-specific incentives override a person’s overall disposition in trust decisions #qualifies (0.75) — Diego Gambetta, Trust - Making and Breaking Cooperative…, 817
• Trustworthiness begets trust via reputation and repeated dealings #corroborates (0.75) — Russell Hardin, Trust and Trustworthiness, 793
• Trust reduces to anticipating the trusted’s incentives toward us #contradicts (0.72) — Russell Hardin, Trust and Trustworthiness, 370
• Apparent betrayal may be consistent trustworthiness under changed incentives #exemplifies (0.72) — Russell Hardin, Trust and Trustworthiness, 64