Attempts to conceptualise trust has led to a confusing array of definitions across the social sciences. This paper focuses on the emergence of trust in economic thought and clarifies its conceptualisation as a term used to identify a purely calculative theory of behaviour in which agents form subjective probabilities regarding the future action of others.
This conceptualisation of trust is distinguished by two assumptions: (i) boundedly rational agents seek to minimise the costs of acquiring information;and (ii) agents’ subjective probabilities regarding the future action of others are ‘Bayesian’ in that they can be attached to any future event and every belief relevant for decision-making is captured therein. Alternatively, if it is assumed that boundedly rational agents find some calculations too difficult to perform even if the information is available, trust is better conceptualised as a complexity reducing social norm. This alternative conceptualisation of trust is grounded in sociology, but depending on the importance given to social context in forming agents’ predispositions towards trusting (and non-trusting) behaviour, it can be employed both as a substitute and as a complement to the calculative conceptualisation of trust found in economic discourse.
