Reputational incentives, not only reciprocity, make thick relationships foster trust

Evidence

Similarly, a thick relationship with another is only one of many possible ways to give that other the incentive to be trustworthy. A thick relationship with the truster commonly gives the trusted such incentives not only through the workings of an iterated prisoner’s dilemma of reciprocal cooperation but also through reputational effects on others in the thick community. Such reputational effects must have a substantial effect on trustworthiness among familiar relations. Reputational effects give me an incentive to take your interests into account even if I do not value my relationship with you merely in its own right. They do this indirectly because I value relationships with others who might react negatively to my violation of your trust. Because my reputation is valuable to me in my further relationships, I encapsulate your interests in my own to some extent. The thickrelationship theory is therefore merely a special case of the encapsulated-interest theory of trust. It is a partial theory that does not generalize to many contexts. In any theory of trust, the restriction to small-scale thick relationships must follow from other principles. Going back to those principles is a first step in generalizing the theory. — Russell Hardin, Trust and Trustworthiness, 143

Categorization

• XREF: Connects directly to Milgrom’s reputation-based trading institutions — reputational effects extend trust beyond face-to-face reciprocity into larger communities. — connects to: Market making enforces a reciprocity norm that sustains the market itself — Karin Knorr Cetina & Urs Bruegger, Global Microstructures: The Virtual…, 87; Personal trust shifts the odds in the trustor’s favour by incentivizing good behavior — Philip Pettit, Republicanism: A Theory of Freedom and…, 1204
• DEFINE: Clarifies that ‘thick relationship’ theory is a special case of the more general encapsulated-interest theory.