From: Restoring Trust in Organizations and Leaders: Enduring Challenges and Emerging Answers,

To trust is to risk. When we lend someone money, we make ourselves vulnerable, hoping or expecting that the borrower will reward our trust and return the money at a later stage, possibly with interest or a reciprocal favor added. Generally, people are more willing to engage in a risky activity, such as buying a stock or starting a business, the greater the expected returns from the activity. This chapter examines whether willingness to trust follows the same logic-that is, whether it responds to changes in the expected value of trusting, much like willingness to take risk responds to changes in the expected value of risk taking. We refer to the responsiveness of trust to changes in the expected value of trust­ ing as the elasticity of trust. A better understanding ofhow elastic trust is will help us choose the most effective means to promote trust. The effectiveness of an inter­ vention designed to promote trust, such as introducing insurance or legal remedies in case of a betrayal, will depend on the context and culture in which enhanced trust is sought. To demonstrate this point, we look at trust behavior and its response to two interventions in three countries of the Arab Middle East (Jordan, Saudi Arabia, and the United Arab Emirates [UAE]) and compare our findings with the context in which the preponderance of trust research has taken place so far, the United States. We employ a binary-choice trust game to measure willingness to trust. Thus, a first mover decides whether or not to trust a (typically anonymous) counterpart, the second mover (Camerer & Weigelt, 1988; Dasgupta, 1988; Kreps, 1990). (For expository convenience, we refer to the first mover with female and the second mover with male pronouns. Note, however, that all our subjects were anonymous and thus gender was not a treatment variable.) If the first mover does not trust, she is said to play "sure" -that is, not to trust. The game ends and both parties receive a moderate payoff, [M,M1. If she trusts, the second mover can either reward or betray trust. Ifhe rewards trust, both he and the first mover are better off than if trust had not been offered, thus yielding payoff [B,B1. If the second mover betrays trust, he receives the highest possible payoff and the first mover the lowest possible payoff [L,H1. Thus H>B>M>L. Trust increases the second mover's payoff whatever