Bounded rationality, value systems and time-inconsistency of preferences as rational foundations for the concept of trust

Abstract

This paper intends to contribute to the (bounded rationality) foundations of trust. After reviewing the extant definitions, I establish the formal structure of situations involving trust. In that context, I examine the paradoxical situation of (calculative) trust in simple settings. Then I show how bounded rationality provides a rationale for a concept of trust that goes beyond that calculative notion. Value systems and possible inconsistency of time preferences are shown to be crucial elements.Trust; Bounded rationality; Value systems; Behavioral decision-making;