222 Trust and Distrust 1

The Effects of Reputation and Post Violation Communication on

Trust and Distrust

Roy Lewicki
Fisher College of Business
The Ohio State University
lewicki.1@osu.edu

and

Ed Tomlinson
Fisher College of Business
The Ohio State University
tomlinson41@osu.edu
222 Trust and Distrust 2

Abstract

This paper proposes a laboratory experiment that will lend empirical support to recent

theoretical advances regarding the simultaneous occurrence of trust and distrust in

relationships. We highlight the role of reputations before a transactional relationship

begins, as well as the impact of apologies in rebuilding trust and reducing distrust

following a trust violation.

KEYWORDS:

TRUST

DISTRUST

REPUTATIONS
222 Trust and Distrust 3

The Effects of Reputation and Post Violation Communication on

Trust and Distrust

Extracting maximum value from professional relationships involves both

capitalizing on coordinated, interdependent relationships to achieve as a collective what

one could not achieve alone via the mechanism of trust, and guarding against exploitation

by others via the mechanism of distrust (Lewicki, McAllister, & Bies, 1998; Lind, 2001).

Indeed, simultaneous trust and distrust dynamics can occur within the same relationship,

thus confronting relationship partners with a paradoxical dilemma. The fundamental

question here involves calibrating how much to trust and how much to distrust. Despite a

vast and established literature on trust, it is the recent theoretical advances regarding

distrust and its simultaneous occurrence with trust that enables us to begin to untangle the

knot that obfuscates these constructs (Lewicki et al., 1998; Lewicki & Wiethoff, 2000;

McAllister, Lewicki, & Bies, 2000).

The purpose of this paper is to explore calibrations of simultaneous trust and

distrust in the development of a transactional relationship. More specifically, we devote

our attention to the development of trust and distrust across a repeated interaction

relationship as a function of the influence of (1) pre-game reputation, and (2) post-

defection verbal communication. We demonstrate the impact of manipulating these

elements in a game context that can operationally indicate trusting and distrusting

actions. To lay the foundation for these objectives, we will provide a review of the

constructs of trust and distrust, and proceed to develop propositions on how reputation

and communication affect the development of trust and distrust in a transactional

relationship.
222 Trust and Distrust 4

Trust and Distrust

The issue of trust has undergone scientific scrutiny from a number of academic

disciplines such as economics (Williamson, 1993), social psychology (Deutsch, 1958),

and sociology (Granovetter, 1985). A synthesis of multiple perspectives on trust at the

interpersonal level is provided in the definition offered by Rousseau and colleagues

(1998): “Trust is a psychological state comprising the intention to accept vulnerability

based upon positive expectations of the intentions or behavior of another” (p. 395).

Lewicki and Bunker (1995, 1996) expanded our conceptualization of

interpersonal trust by arguing that there are several fundamental forms of trust, and that

trust builds sequentially through these stages. Trust at the lowest level is calculus-based

trust (CBT), a transactional, market-oriented calculation in which people decide to trust

based on the belief that trust will not be violated because the rewards of being

trustworthy, coupled with the potential losses in reputation and punishment for being

untrustworthy, are seen as outweighing any benefits of violating trust. Thus, CBT

describes arms-length, transactional exchanges that are the focus of the present

investigation, as compared to trust at higher stages that is grounded in a strong emotional

attachment between the parties and a sense of shared goals and values (identification-

based trust (IBT)). When trust is present, individuals are more likely to cooperate (Tsai &

Ghoshal, 1998; Zand, 1972), engage in information sharing (Mellinger, 1956; O’Reilly &

Roberts, 1979), and provide mutual assistance (Bouty, 2000; McAllister, 1995).

However, as mentioned above, the benefits of trust do not come without any risk.

De facto, trusting action necessitates the presence of vulnerability (Mayer, Davis, &

Schoorman, 1995; Rousseau et al., 1998). This vulnerability is often exploited (Robinson
222 Trust and Distrust 5

& Rousseau, 1994), with harmful consequences such as lower job performance, civic

virtue, and intentions to remain with one’s employer (Robinson, 1996). Despite a

traditionally normative view of trust as good and distrust as bad in relationships (e.g.,

Erikson, 1963), a more contemporary (and we argue, more reasonable) view is that too

much trust is as bad as too little (Jeffries & Reed, 2000; Wicks et al., 1999). A proper

dose of distrust can indeed be healthy for relationships, and the simultaneous

management of both trust and distrust in relationships can allow individuals to get the

most out of professional relationships while minimizing damage due to exploitation. To

explicate this point in greater detail, we turn to recent theoretical advances in

understanding trust and distrust dynamics.

A new theoretical framework for understanding trust and distrust was presented in

a paper by Lewicki, McAllister, and Bies (1998). Contrary to the traditional notion of

trust and distrust forming opposite ends of the same, unidimensional construct, these

authors argued that there is a fundamental distinction between trust and distrust. They

defined trust as confident positive expectations regarding another’s conduct, signaling “a

belief in, a propensity to attribute virtuous intentions to, and a willingness to act on the

basis of another’s conduct” (p. 439). On the other hand, distrust is defined as confident

negative expectations regarding another’s conduct, signaling “a fear of, a propensity to

attribute sinister intentions to, and a desire to buffer oneself from the effects of another’s

conduct” (p. 439). Clearly, then, low trust is distinct from distrust: low trust signals low

confidence in things hoped for, whereas distrust signals a sense of assurance regarding

things feared. Distrust fosters qualitatively different behaviors from trust, such as

monitoring and defensive behavior (Ouchi, 1979; Pruitt & Rubin, 1986; Wall & Calister,
222 Trust and Distrust 6

1995), cynicism (Kramer, 1999), revenge (Bies & Tripp, 1996), and perhaps even

paranoia (Kramer, 1994). In this manner, trust and distrust are not bipolar opposites;

rather, they are separate but linked dimensions that both entail movement toward

certainty in order to manage the complexity of social relationships (Luhmann, 1979).

Moreover, viewing trust and distrust as separate but linked dimensions allows us

to consider the simultaneous co-existence of both phenomena within relationships. This

combination of both trust and distrust is referred to as ambivalence (Lewicki et al., 1998),

and is evidenced by the fact that relationships involve individuals coming to know others

in many contexts and situations, such that we may trust another in one context, yet

distrust them in another. You may have friends you would trust to baby-sit your child,

but not to pay back money you loaned them. Notions of ambivalence have been

established in other research arenas, such as work showing the co-existence of positive-

valent and negative-valent attitudes (Cacioppo & Bernston, 1994).

Lewicki and Wiethoff (2000) provided the theoretical development of integrating

the stage model of trust (Lewicki & Bunker, 1995, 1996) with the proposed framework

on trust and distrust (Lewicki et al., 1998). In terms of the current study on trust and

distrust dynamics within transactional relationships, these scholars developed the

construct definitions that are used in this paper:

Calculus-based trust (CBT) is confident positive expectations regarding another’s

conduct. It is grounded both in knowledge gained from previous interpersonal

transactions and the overall anticipated benefits to be derived from acting in a

trustworthy way.
222 Trust and Distrust 7

Calculus-based distrust (CBD) is confident negative expectations regarding

another’s conduct. It is also grounded in knowledge gleaned from interpersonal

transactions, but the overall anticipated costs of a trusting relationship are assumed to

outweigh the anticipated benefits.

Empirical support for the distinction between trust and distrust comes from

several studies. In a study of coal mine workers’ trust in management, Clarke and Payne

(1997) examined the structural characteristics of trust. Their results indicated that the

workers’ certain, negative assertions regarding the behavior of management (distrust

relevant statements) was clearly distinct from certain, positive assertions about the

behavior of management (trust relevant statements).

Research on individual differences by Robinson, Shaver, and Wrightsman (1991)

also supports the view that trust and distrust cannot be reduced to opposite ends of a

single continuum. They found that trust beliefs are distinct from distrust beliefs

(cynicism).

A quasi-experimental study on ambivalence by Priester and Petty (1996) clearly

showed that individuals can simultaneously regard specific others with various

combinations of positive traits (including trustworthy and trusting) and negative traits

(including untrustworthy, dishonest, and untrusting).

Finally, recent empirical work by McAllister, Lewicki, and Bies (2000) examined

the impact of trust, distrust, and relationship quality on the use of hard influence tactics.

These researchers wrote scale items for trust and distrust, and administered a field survey

to 135 middle managers from a large electric utility company. A factor analysis

supported the view that trust and distrust are separate dimensions that can co-exist.
222 Trust and Distrust 8

Up to this point, we have argued that trust and distrust are separate but linked

dimensions, each with its unique consequences. Trust is associated with confidence,

assurance, and hope, whereas distrust is associated with defensiveness, cynicism,

vigilance, and perhaps even paranoia. This position also entails that there are elements

that contribute to the development of trust and elements that contribute to the

development of distrust. We now examine how trust and distrust develop in relationships,

and specifically consider how a trustee’s reputation contributes to this development.

The Effect of Prior Reputation on Current Trust and Distrust Behavior

While an individual’s past reputation for trustworthy or untrustworthy behavior

has a significant impact on how one approaches current transactions with that person, the

impact of reputations has been understudied in the trust and negotiation literature. To a

significant extent, this may be due to the tendency for much of that research to be

‘transactional’ in nature--that is, that the traditional format for laboratory research is to

bring strangers together to exchange in a trust-related or negotiation-related transaction,

either assuming and/or assuring that the parties do not know each other and hence bring

no reputation to the transaction.

Past reputations can be powerful elements in shaping current expectations and

orientations toward the other party. Thompson (2001) notes that reputations are often

more extreme and polarized than the person they represent, and that they can be

described as judgmental, consistent, immediate, and inferential. The judgmental aspects

of a reputation lead us to use a small amount of past experience with the other and then

assign overall halo qualities to them, such as “good” or “bad”, “trustworthy” or

“untrustworthy” (see Osgood, Suci, & Tannenbaum, 1957). The consistent qualities of a
222 Trust and Distrust 9

reputation assure that once we have assigned an overall quality, we tend to make other

judgments about this party that are consistent with this overall view. Thus, we might

generalize to assume that a person who is trustworthy is also predictable, likeable or

cooperative, or that a person who is known for being untrustworthy is also unpredictable,

difficult to socialize with, and uncooperative. Thirdly, reputational effects form quickly.

Even very brief exposure to another can lead to quick judgments that are often long

lasting (Bargh, Lombardi, & Higgins, 1988). Moreover, that brief exposure can contain

very limited information, yet be very powerful in shaping a very strong and lasting

impression of the other. In summary, reputational judgments are most likely made

quickly, are often based on very little information, and yet can become durable and long-

lasting in the way we approach another.

Several studies have examined the role of reputations on current behavior in

negotiation and trust contexts. Glick and Croson (2001) created five reputation types

(Liar/manipulator, Tough but Honest, Nice and Reasonable, Cream Puff, and No

Reputation) and presented them to students in a negotiation course. For 78% of the

students, the other’s reputation was a significant element in shaping the strategy they

used. Reputations also tended to dictate the type of strategy a negotiator used. Against a

liar/manipulator, 61% of negotiators used distributive tactics and 10% used integrative

tactics; against tough negotiators, 49% used distributive tactics and 35% used integrative

tactics; against nice negotiators, 30% used distributive tactics and 64% used integrative

tactics, while against cream puff negotiators, 40% used distributive tactics and 27% used

integrative tactics.
222 Trust and Distrust 10

Similarly, Barry, Fulmer, and Long (2002) studied the effect of a negotiator’s

reputation on the tendency to use ethically marginal tactics toward that negotiator. They

predicted that an individual would be more likely to use ethically marginal tactics toward

an opponent (e.g., lies, bluffs, deceptions, etc.) to the degree that the target individual

was rated by (his) peers as having a negative reputation. Their results indicate that

negotiators were more willing to use cognitive ethically marginal tactics--

misrepresentation and inappropriate information gathering--against someone with a

negative reputation. However, the use of emotional management tactics did not yield the

same result, and, in fact, found that with an opponent who had a negative reputation,

individuals were more likely to use such tactics (e.g., false sympathy, false delight, false

caring and liking for the other) when the other had a negative reputation than a positive

reputation.

The foregoing analysis of reputations enables us to develop more specific

propositions regarding how a trustee’s reputation facilitates the development of trust and

distrust.

Trust development. At the very beginning of a professional relationship, CBT

may be grounded merely in the other’s reputation for trustworthiness (Butler, 1991;

Gabarro, 1978; McKnight, Cummings, & Chervany, 1998). Reputation is a powerful

signal of trustworthiness, because it allows individuals to presume that the experiences of

third party interactions with a trustee will be predictive of their own interactions with the

trustee. Particularly in CBT relationships, trustees know that their reputation is vital to

gaining and maintaining the trust of others (Shapiro, Sheppard, & Cheraskin, 1992).

Accordingly, one’s reputation is a valuable asset (when trustworthiness can be

222 Trust and Distrust 11

sustained): “People invest resources for the purpose of building a reputation for honesty”

(Dasgupta, 1988, p. 70). However, it can also be a dangerous liability (when

trustworthiness is broken): “If one party begins to violate the other’s trust, the violated

party can quickly let it be known, throughout the accused’s network, that the other is a

disreputable individual… Even if you are not an honest individual, having a reputation

for honesty (or trustworthiness) is a valuable asset that a businessperson would want to

maintain” (Lewicki & Bunker, 1996, p. 120). Granovetter (1992) cogently demonstrates

how reputation can be a powerful deterrent to untrustworthy behavior:

My mortification at cheating a friend of long standing may be substantial even

when undiscovered. It may increase when the friend becomes aware of it. But it

may become even more unbearable when our mutual friends uncover the deceit

and tell one another. (p. 44)

We summarize this discussion with the first of a series of propositions:

Proposition 1: Individuals with a reputation for acting in a trustworthy manner

will lead the other to exhibit higher initial trust and lower initial distrust.

Over time and through repeated interactions, individuals can accumulate evidence

that the relationship partner is engaging in behaviors that are consistent and predictable

(Gabarro, 1978), reliable (McAllister, 1995), competent (Mayer et al., 1995), and open

and transparent (Shaw, 1999). In the words of Lewicki and Wiethoff (2000), “In work

relationships, then, CBT is enhanced if people (1) behave in the same appropriate way

consistently (at different times and in different situations), (2) meet stated deadlines, and

(3) perform tasks and follow through with planned activities as promised” (p. 96).
222 Trust and Distrust 12

Accordingly, conduct that confirms an impression of trust can solidify initial perceptions

of trust based on reputation (Burt & Knez, 1996)

Distrust development. Although much of the earlier research on distrust assumed

that this construct was the bipolar opposite of trust, we still have a body of literature that

indicates how reputation contributes to the development of distrust.

In his now classic studies on the origins of trust and suspicion, Deutsch (1958)

identifies the motive orientation of the relationship partner as a key variable driving

attributions of how much a relationship partner is to be distrusted. Distrust (or suspicion)

is activated to the extent that an individual believes he/she is the object of malevolent

intent. Deutsch (1958) studied this phenomenon by manipulating the confederate’s

reputation, and informing subjects before an experimental game. When the perceived

intent of the relationship partner is competitive (i.e., that person wants to do as well for

himself as possible and outperform the relationship partner), there is reason to be

distrustful. Distrust can also arise when the relationship partner is perceived to have an

individualistic orientation (i.e., that person wants to do as well for herself as possible

without regard for the relationship partner), but only when certain situational constraints

are present. Specifically, individuals are more likely to distrust those with an

individualistic orientation when (1) the relationship partner does not communicate his/her

intention beforehand and (2) when decisions are made non-simultaneously (that is, one

person makes his/her choice first, and this decision is known to the other before he makes

his choice).

Finally, at least one study (Burt & Knez, 1996) has examined the consequences of

reputations on subsequent development of distrust. Their analysis indicates that the

222 Trust and Distrust 13

occurrence of a trust violation may create future uncertainty. Distrust, however, may not

necessarily increase due to a single defection, as distrust implies certainty. A defection

prompts attributional search, and Burt and Knez propose that the indirect influence of a

third party acts to solidify perceptions of the relationship partner: “The implication is that

indirect connections ‘lock in’ relationships at positive and negative extremes by making

[one party] more certain of his or her trust in [the other]” (p. 72, emphasis added). Their

empirical results show that trust builds incrementally, but distrust has an immediate and

catastrophic effect that is significantly amplified by third parties. In fact, distrust is

disproportionately, negatively affected by third parties.

Proposition 2: Individuals with a reputation for acting in a distrusting manner will

led the other to exhibit higher initial distrust and lower initial trust.

Lewicki and Bunker (1995) assert that CBT is initially tentative and partial. At

the beginning of a transactional relationship, exposure to risk is limited and trust is

extended tentatively such that future trust can only grow when previous trust has been

honored. This implies that individuals may be willing to extend some modicum of trust

(with minimal vulnerability) as a test to see if it is honored, with the assumption that if

nothing is ventured, nothing will be gained.

Lewicki and colleagues (1998) further extended this notion by arguing that trust

and distrust can coexist. This means that individuals can confront trustees with both high

trust and high distrust, and such a relationship can be successfully managed when trustors

“limit their interdependence to those facet linkages that reinforce the trust and strongly

bound those facet linkages engendered by the distrust” (p. 447). Lewicki and colleagues

cite a joint venture between Boeing and the Japanese, where cooperation was enabled by
222 Trust and Distrust 14

joint sharing of significant technical and proprietary information, yet Japanese engineers

were only allowed within “secure” areas of Boeing’s facility. Such a relationship might

be summarized by the adage, “Trust, but verify.” Opportunities are pursued, yet

vulnerabilities are salient and continually monitored.

Proposition 3: Individuals with a reputation for acting in both a trusting and

distrusting manner will lead the other to exhibit both higher initial trust and

distrust than individuals with no reputation.

Proposition 4: Responses to individuals who have a reputation for both trust and

distrust will be dominated by distrust.

The Effect of Post-Violation Communication on Trust and Distrust Behavior

In the preceding section, we developed propositions on how reputation shapes

trusting and distrusting behaviors before a transactional relationship begins. We argued

that reputations help individuals form expectations about how transactional relationships

will unfold. Now, we consider how these relationships are impacted after a trust violation

– an event that provides disconfirming evidence of confident positive expectations.

Specifically, we develop propositions on how post-violation communication in the form

of apologies affects subsequent trusting and distrusting behaviors.

Not surprisingly, trust violations can diminish the level of trust, and if there is

reason to develop confident negative expectations, raise the level of distrust. Because the

violation can deny the offender any future cooperation from the victim, and damage the

offender’s identity by portraying him/her in a negative light, the offender may attempt to

rebuild trust and lower distrust by post-violation verbal communication (Tedeschi &

Norman, 1985). We consider each of these in turn.

222 Trust and Distrust 15

Trust development. Reparative efforts often begin with an apology (Goffman,

1972; Lewicki & Bunker, 1996; Tedeschi & Norman, 1985). As an impression

management tactic, Greenberg (1990) argues that apologies are intended to “convince an

audience that although the actor accepts blame for the undesirable event, any attributions

made on the basis of it would not be accurate” (p. 133). An apology conveys remorse for

inflicting harm on the trustor, and a desire to restore the damaged relationship. Apologies

are credited with mitigating negative reactions after a transgression (Ohbuchi, Kameda,

& Agarie, 1989; Sitkin & Bies, 1993) and promoting forgiveness (Takaku, 2001).

Tomlinson, Dineen, and Lewicki (in press) showed that apologies are important

antecedents to victim willingness to reconcile after a broken promise in a CBT

relationship. Another recent study showed that apologies and simple explanations led to

improved cooperation after a trust violation in a Prisoner’s Dilemma game (Bottom,

Gibson, Daniels, & Murnighan, 2002).

Another key study was performed by Schweitzer, Hershey, and Bradlow (2001).

These authors were interested in the impact of deception and post-violation

communication on trust behavior after a trust violation. The authors used a variation of

the Trust Game (Berg, Dickhaut, & McCabe, 1995; Malhotra & Murnighan, 2000) as the

key research vehicle, and examined trust recovery as a function of no communication, a

promise alone, and a promise plus apology. While they found that deception significantly

harms both initial and long-term trust recovery (presumably by activating high distrust),

trust restoring communication, such as promises and apologies, can help repair trust.

Finally, we note that the extensiveness of the apology can be an important factor

in determining its effectiveness in rebuilding trust. While a simple, “I’m sorry” may have
222 Trust and Distrust 16

some degree of effectiveness in rebuilding trust and cooperation (Bottom et al., 2002;

Schweitzer et al., 2002), a more elaborate apology may signal more genuine remorse and

a more sincere desire to restore the relationship to vitality (Lewicki & Bunker, 1996;

Schwartz, Kane, Joseph, & Tedeschi, 1978). Research has shown that as the harm

inflicted by a trust violation grows, a more elaborate apology may be necessary (Ohbuchi

et al., 1989; Schlenker & Darby, 1981). Taken together, this leads to the following:

Proposition 5: An apology will be more effective than no communication in

stimulating trust recovery after a trust violation.

Proposition 6: An extensive apology will be more effective than a mild apology in

stimulating trust recovery after a trust violation.

Distrust development. After a trust violation, distrust may be activated if the

trustor has reason to be confident of future violations. Post-violation communication may

allow the offender to frame the violation in a manner that conveys a lack of malevolent

intent, and persuade the victim that the violation is an isolated event that should not be

construed as a prediction of future trust episodes (Tomlinson, 2003).

Several findings from the earlier cited paper by Schweitzer and colleagues (2002)

help us infer how distrust operates in the face of post-violation communication. In this

study, a promise significantly increased initial trust recovery, but it was not adequate to

sustain long-term trust repair. In the long term, trustworthy actions are just as critical as

the promise. So, while an apology may help increase trust, distrust may not significantly

subside until a pattern of subsequent cooperation emerges in future interactions.

Proposition 7: An apology will not significantly reduce distrust in the short term.

Proposition 8: An apology will significantly reduce distrust in the long term.

222 Trust and Distrust 17

In addition, the promise plus apology condition did not significantly restore trust

more than a promise alone. The authors speculate that the apology may not have been

sufficiently sincere, strong enough, or made a clear attribution for Player 2’s prior

behavior. However, it is also instructive to note that more complete apologies contain

promises of future acceptable behavior (Goffman, 1972; Ohbuchi et al., 1989). If this is

the case, these manipulations may not have contained differentially meaningful

information for subjects. At any rate, we argue that more extensive apologies should be

more effective than mild apologies in distrust reduction. This is drawn from reasoning in

the previous section that more elaborate apologies signal greater remorse and indicate a

stronger desire to regain the trust of the victim.

Proposition 9: An extensive apology will be more effective in reducing distrust

than a mild apology.

The Present Study

The present study will explore the role of past reputation and reparative

communications on trust and distrust behaviors and attitudes. The proposed study seeks

to extend refinement of the measures of trust and distrust by using an experimental

platform that captures behavioral measures of these two variables. More specifically, this

study is designed to show how people actually behave when placed in situations that

make issues of trust and distrust salient, not merely how they respond to survey measures

(which may be a stronger reflection of attitudes and intentions as opposed to ensuing

behaviors).
222 Trust and Distrust 18

The research vehicle will be the Trust Game (Berg et al., 1995), a two player

simulation that permits investigation of trust-initiating and trust-responding moves (see

description in the Methods section). Two main independent variables will be employed:

1. Prior Reputation of Player 2. Information will be presented to Player 1 (the

experimental subject) that describes the reputation of Player 2 (a confederate of the

experimenter). Prior to the beginning of the game, information about the other party will

be given to each player. Reputation will be manipulated so as to give Player 2 one of

three reputations:

* A trustworthy reputation (high trust, low distrust). Player 2 will be portrayed as

having participated in similar variations of the Trust Game in the recent past, and having

behaved in a generally trustworthy manner.

* An untrustworthy reputation (low trust, high distrust). Player 2 will be portrayed

as having participated in similar variations of the Trust Game in the recent past, and

having behaved in a generally untrustworthy and deceptive manner.

* A mixed reputation. Player 2 will be described as both trustworthy and

untrustworthy reputation (high trust, high distrust): Player 2 will be portrayed as having

participated in similar variations of the Trust Game in the recent past, and having

behaved in both a trustworthy and untrustworthy manner.

2. Trust-repairing communications. In the present study, we intend to explore the

impact of no communication, and two forms of reparative communication (i.e., apology)

messages:

* A no communication condition, so that the impact of reputation alone on

subsequent trust and distrust can be observed

 222 Trust and Distrust 19

* A ‘deep’ apology, containing content that expresses deep regret and personal

disappointment, and committing to reformed action in the future.

* A ‘mild’ apology, expressing some regret and disappointment, and broadly

indicating that reform will be pursued in the future.

METHOD

This study employs a version of the Trust Game (Berg, Dickhaut, & McCabe,

1995; Malhotra & Murnighan, 2000; Schweitzer & Hershey, 2001). The Trust Game is a

two-person game; each round of the game has two choices, made sequentially. Player 1

chooses whether (or not) s/he trusts Player 2 by passing (or not passing) a sum of money.

If Player 1 chooses not to trust, the trial ends; Player 1 receives a moderate outcome, and

Player 2 receives nothing. However, if Player 1 decides to trust (by passing money), that

sum gets tripled, and Player 2 gets to decide how to allocate this money across both

players. In this manner, the Trust Game captures trust from the point of view of Player 1,

who must choose to accept vulnerability at the discretion of Player 2. When multiple

trials of the game are played, players are told that one of their trials will be selected to be

the actual payoff at the end of the game.

The Trust Game also allows for survey measures to be inserted between selected

trials, which can be used to assist in the validation and refinement of scales on trust and

distrust. Moreover, the sequential choices in the Trust Game more precisely capture the

constructs of trust and distrust than traditional Prisoner’s Dilemma (PD) games; in PD

games, subjects make their choices simultaneously. When a subject defects in a PD

game, it is unclear whether the defection was motivated by a desire to harm the other

party, or merely to protect against being harmed by the other party.

222 Trust and Distrust 20

The Trust Game can also be adapted to measure distrust by making contracts

available to the players. Contracts are mechanisms that reduce agency costs by dictating

the terms of exchanges and enforcing compliance. Much like trust, contracts can reduce

uncertainty in the face of vulnerability. However, reliance on a contract to enforce an

agreement can signal an expectation of the other player defecting. If Player 1 can choose

to impose a contract, this is a signal of distrust in a relationship, as a contract is being

chosen to facilitate the exchange instead of trust.

In our version of the study, all participants will assume the role of Player 1 and

play the Trust Game via computer. Player 1’s will be led to believe they have been

paired with other subjects acting as Player 2, but will in reality be interacting with

preprogrammed feedback that we administer via the computer program. Participants will

be instructed that one of their interactions will be randomly chosen to determine their

actual monetary payoffs for the experiment. Information on the other player’s reputation

will then be introduced. Game behavior will begin, and all variations of the game will

contain a defection by Player 2 in the early rounds (Schweitzer et al. 2002) Once that

defection has occurred, one of the several communication messages will be sent by

Player 2 in an effort to repair the trust.

Discussion

This paper proposes a laboratory experiment that will lend empirical support to

recent theoretical advances regarding the simultaneous occurrence of trust and distrust in

relationships. We highlight the role of reputations before a transactional relationship

begins, as well as the impact of apologies in rebuilding trust and reducing distrust

following a trust violation.

222 Trust and Distrust 21

Data will be collected in Spring, 2003, and reported at the IACM meeting should

this paper be accepted.

 222 Trust and Distrust 22

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