In a principal–agent framework, principals can mitigate moral hazard problems not only through extrinsic incentives such as monitoring, but also through agents’ intrinsic trustworthiness. Their relative usage, however, changes over time and varies across societies. This paper attempts to explain this phenomenon by endogenizing agent trustworthiness as a response to potential returns. When monit...

Trust is expected to reduce transaction costs and agency costs and thus influence the cost of credit for small businesses. Assessments of trustworthiness are based on the ability, benevolence and integrity of the owner manager. The study examines whether lending managers’ assessments of the trustworthiness of SME owner managers are associated with the interest rate charged. Data were obtained f...

Economic interactions often imply to gauge the trustworthiness of others. Recent studies showed that when making trust decisions in economic games, people have some accuracy in detecting trustworthiness from the facial features of unknown partners. Here we provide evidence that this face-based trustworthiness detection is a fast and intuitive process by testing its performance at split-second l...

Trustworthiness of Internet-based software systems, apps, services and platform is a key success factor for their use and acceptance by organizations and end-users. The notion of trustworthiness, though, is subject to individual interpretation and preference, e.g., organizations require confidence about how their business critical data is handled whereas end-users may be more concerned about us...

Prior meta-analytic evidence has indicated no association between relationship length and perceived trustworthiness. Viewing trustors as information processors, the authors propose a model in which relationship length, although having no direct effect on perceived trustworthiness, moderates the association between perceived trustworthiness and the basis on which people decide to trust each othe...

Enormous benefits can result from basing requirements, architectures, implementations, and operational practices on well-defined and well-understood generally accepted principles. Furthermore, any set of principles is by itself clearly incomplete. However, considerable experience, understanding, and foresight are needed to use such principles productively. In this document, we itemize, review, ...

We analyze experimental evidence on whether untrained subjects can predict how trustworthy an individual is. Two players on a TV show play a high stakes prisoner’s dilemma with pre-play communication. Our subjects report probabilistic beliefs that each player cooperates, before and after communication. Subjects correctly predict that women, and players who voluntarily promise that they will coo...

The theory of the nonprofit institutional form developed by Henry Hansmann emphasizes importance organizational trustworthiness in a sector defined hard-to-measure outputs. This body effectually rationalizes normative approach to financial management focused on maintaining through fiscal probity signaling. Such signals include measurable indicators overhead minimization, leanness, revenue diver...

A publisher uses an honor-system for selling a newspaper in the street. The customers make payments into a cash-box, but can also just take the paper without paying. Payments are not monitored and highly anonymous; hence customers exhibit trustworthiness if they pay for the paper. We run a natural field experiment to identify motives behind payments. The experiment reveals that trustworthiness ...