Trustworthiness as an Economic Asset<

The evaluation of trust in economic decision making remains on the periphery of mainstream economic analysis and teaching. Yet business managers use trustworthiness in daily exchanges to create competitive advantages for their firms. An exploratory empirical test of Barney and Hansen’s three levels of trust (weak, semistrong, and strong) and Lewicki and Bunker’s portfolio of governance mechanisms revealed that strong-form trust exists in day-to-day business relationships along with other governance mechanisms. Identity-based transactions were more prevalent than were weak trust market exchanges in important economic transactions. Trust is an important lubricant of a social system. It is extremely efficient; it saves a lot of trouble to have a fair degree of reliance on other people’s word (Arrow, 1974, p. 23). Trust is at the root of any economic system based on mutually beneficial exchange. If a significant number of businesspeople violated the trust upon which our interactions are based, our court system and our economy would be swamped into immobility