TRUSTWORTHINESS AS AN ECONOMIC ASSET

Abstract

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 HansenÂ’s three levels of trust (weak, semistrong, and strong) and Lewicki and BunkerÂ’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.Institutional and Behavioral Economics, International Relations/Trade,