Reputation effects can substitute for direct iterated exchange in producing trustworthiness

Evidence

The encapsulated-interest account of trust holds that the trusted encapsulates the interest of the truster and therefore has incentive to be trustworthy in fulfilling the truster’s trust. The encapsulation happens through causal interactions in the iterated one-way trust game, iterated exchange (or prisoner’s dilemma), and thick relationships. None of these, however, is itself definitive of the trust relation. They are all merely ways to give the trusted incentive to take the interests of the truster into account. … For example, we might suppose that a near variant of the iterated exchange relationship is reputational effects on my incentives (as discussed further in chapter 6). If I fulfill your trust, that action might help me in other relationships that I value or would value, and if I fail your trust, that action might jeopardize other relationships I might have. — Russell Hardin, Trust and Trustworthiness, 151

Categorization

• DEFINE: Defines the encapsulated-interest model precisely and clarifies that iterated exchange is only one mechanism, not the definition itself.
• XREF: connects to: Becoming recognized by peers functions as a substitute for financial success in Web 2.0 — Alice E. Marwick, Status Update: Celebrity, Publicity,…, 321; Party reputations substitute for direct knowledge in democratic trust — Anna M. Grzymala-Busse, Redeeming The Communist Past: The…, 73