Defining Trust Using Expected Utility Theory

Arai Kazuhiro

Hitotsubashi Journal of Economics, 2009, vol. 50, issue 2, pages 99-118

Abstract: Trust has been discussed in many social sciences including economics, psychology, and sociology. However, there is no widely accepted definition of trust. Inparticular, there is no definition that can be used for economic analysis. This paper regards trust as expectation and defines it using expected utility theory together with concepts such as betrayal premium. In doing so, it rejects the widely accepted black-and-white view that (un) trustworthy people are always (un)trustworthy. This paper also discusses various determinants and properties of trust on the basis of the idea that trust is not simply a matter of intention.

Keywords: Definitions of Trust; Distrust Premium; Betrayal Premium; Properties of Trust; Expected Utility Theory (search for similar items in EconPapers)
JEL-codes: D81 Z13 (search for similar items in EconPapers)
Date: 2009
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Persistent link: http://EconPapers.repec.org/RePEc:hit:hitjec:v:50:y:2009:i:2:p:99-118

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