Trust-based agency relationships fail when the principal cannot exit or evaluate.

Evidence

These cases can occur when (1) agency relationships are not embedded in networks of social relations, (2) relationships are episodic rather than continuing, (3) principals are “one-shotters” and agents “repeat-players,” (4) principals cannot evaluate agent performance (because they lack access or expertise, are literally incompetent, or are committed to futures transactions and necessarily await delivery on agent promises), (5) agents have actual possession of principals’ property (and, therefore, exit may not be a viable option for aggrieved principals), or (6) agency offerings are not easily rescinded or reversed (e.g., surgery). — Shapiro, Susan P., The Social Control of Impersonal Trust, 55

Categorization

• DEFINE: A crisp taxonomy of the six structural conditions that convert bare trust into vulnerable dependence.
• XREF: Echoes the economic concept of ‘hold-up’ and incomplete contracts; connects to Ouchi’s clans and market-vs-hierarchy work. — connects to: Loss of positional power can void the sanction backing a trust relationship; Trust is structurally vulnerable because agents can exploit principals’ ignorance and distance. — Shapiro, Susan P., The Social Control of Impersonal Trust, 35; Contractual trust fails where state enforcement is sporadic (+5 more)

Related

• Principals delegate precisely because they cannot specify or evaluate agent performance. (similarity 0.82)
• Trust is structurally vulnerable because agents can exploit principals’ ignorance and distance. (similarity 0.81)
• Trust is structurally precarious because agents control symbolic wealth at a distance from principals. (similarity 0.79)
• Impersonal trust emerges where principals lose direct power to regulate agents. (similarity 0.79)

Broader Connections

• Trust is structurally vulnerable because agents can exploit principals’ ignorance and distance. #expands (0.88) — Shapiro, Susan P., The Social Control of Impersonal Trust, 35
• Kinship-based trust fails when its sanctioning institutions do not migrate #exemplifies (0.82)
• Contractual trust fails where state enforcement is sporadic #exemplifies (0.80)
• Loss of positional power can void the sanction backing a trust relationship #complicates (0.78)