Trust as risk and the foundation of investment value

Trust is an essential ingredient of the investment process because investing is complex, the world contains irreducible uncertainty, and humans are naturally predisposed to cooperate. Traditional financial models inappropriately treat trust as probability or implicitly ignore it. This paper argues that trust has both cognitive and affective attributes that make it an important determinant of perceived investment risk. Specifically, perceived risk varies inversely with trust. This paper also discusses how trust offers a logical and parsimonious explanation for many financial asset pricing anomalies. Trust is the unseen faith underlying investment value.     

Social capital and equilibrium selection in Stag Hunt games

Surveys of trusting attitudes are found to correlate with growth and development outcomes. The question of why trust attitudes correlate with economic growth remains open however. I argue that trust surveys capture facets of social capital not previously investigated, namely, coordination. Hence a complete investigation of the relationship between trust attitudes in growth must encompass their predictive power in a coordination game. This study shows that affirmative responses to surveys of trust attitudes correlate with and predict efficiency-supporting behavior in a Stag Hunt game.     

Trust and recognition: a comparative study of client attitudes and workers' experiences in the welfare services

Since professional conduct is important in the lives of many people, trust and recognition between professionals and their clients are critical. Social professionals administer public resources on behalf of the welfare state, and their approaches and methods of intervention are mostly founded in current welfare policy. Despite this mandate, social professionals receive little acknowledgement and recognition. This article investigates the level of public trust in the Norwegian social services compared to the national insurance agencies, and to what extent the providers of these welfare services experience recognition and public approval. A central question is whether these aspects of external appreciation influence the professionals' motivation and feelings of accomplishment. Findings indicate that the social services receive less public support than the social insurance agencies, owing to the discretionary services provided and the stigma related to social assistance. The variation in institutional trust is reflected by the differences in workers' subjective experiences. That result notwithstanding, the service providers reveal a split view of themselves: while they experience themselves positively with respect to involvement and pride in their work, they also see themselves through the deprecating eyes of the public.     

“90后”大学生网络信任建构过程研究

网络信任是随着网络时代的来临而出现的新的信任类型,是网络社交发展到一定阶段的后天产物。其发生主体是切实的社会个体在网络空间形塑的虚拟角色,发生情境是个体互动所处的具体网络空间,其建构过程大致经历了初建、维系与深化、破裂、走向现实几个阶段。网络信任的建构过程不断涉及个人的认知与判断,信任决定的修正依据是个体在网络社交过程中逐渐暴露出的信息。网络信任的发生概率非常低,仅极少数的信任获得了稳定发展,甚至转变为现实信任。     

Trust and partner selection in social networks: An experimentally grounded model

This article investigates the importance of the endogenous selection of partners for trust and cooperation in market exchange situations, where there is information asymmetry between investors and trustees. We created an experimental-data driven agent-based model where the endogenous link between interaction outcome and social structure formation was examined starting from heterogeneous agent behaviour. By testing various social structure configurations, we showed that dynamic networks lead to more cooperation when agents can create more links and reduce exploitation opportunities by free riders. Furthermore, we found that the endogenous network formation was more important for cooperation than the type of network. Our results cast serious doubt about the static view of network structures on cooperation and can provide new insights into market efficiency.     

The social capital and mental health of long-term social assistance recipients in Norway

Previous findings have generally demonstrated the positive mental health benefits of social capital. However, the mental health benefits of social capital for social assistance recipients have not been fully demonstrated. This study analyses the mental health benefits of individual-level bonding and individual-level bridging social capital for 551 Norwegian longer-term social assistance recipients. The findings demonstrate that bonding social capital, i.e. contacts with friends and access to social resources, are positively associated with mental health. Of the variables in the study that relate to bridging social capital, social trust and trust towards the social worker particularly show significant associations for mental health. Consequently, it is important that the mental health benefits of various forms of bonding and bridging social capital are acknowledged within social work practices and that social work practitioners actively aim to increase social trust in longer-term social assistance recipients.     

‘We,the Congolese,we cannot trust each other’. Trust,norms and relations among traders in Katanga,Democratic Republic of Congo1

Congolese traders in Katanga claim that they cannot trust their peers, customers, and employees. Existing literature about social capital in Africa does not enhance our understanding, as it tends to consider trust as depending on the degree of social knowledge. In the Congo, social proximity does not exclude suspicion, nor does social distance necessarily prevent trust. Based on ethnographic fieldwork, this article aims at developing a more detailed framework. It studies how Congolese traders negotiate two key norms for the building of economic trust – property and reciprocity – with non‐relatives, distant relatives, and close relatives.     

Trust and embedded markets: A multi-method investigation of consumer transactions

Previous work shows that, as the buyer's uncertainty about the quality of some good or service increases, so does the tendency to purchase that good or service via embedded transactions, rather than from strangers. While this previous work explains variation in embedded exchange across different types of purchases, it does not address variation in embedded exchange across persons. Our research integrates the embeddedness and trust literatures to explain variation in within-network exchanges based on an interaction of the purchaser's generalized trust and the level of uncertainty entailed in the purchase (i.e., whether there exists an incentive for the seller to misrepresent the quality of some good or service). For purchases involving uncertainty, low-trusters will tend to forgo risky transactions with strangers, opting instead for the increased certainty of embedded markets. High-trusters, on the other hand, will be more likely to transact with strangers (despite the increased risk), from whom they can often find better deals. We should not expect any differences between high- and low-trusters for products that do not entail uncertainty. Results from two data sources, responses from a nationally representative survey of the U.S. population and behavioral responses in new laboratory experiments, provide support for the arguments.     

Trust and social capital in the regulation of lending activities

When a bank grants a loan, it takes the risk that the borrower will not honor his debt. To reduce this uncertainty, banks have created instrumental evaluation methods in order to try to evaluate the risk more objectively. An analysis of financial counselors’ practices shows the limits of these methods. To obtain information needed for the financial risk evaluation and to reduce the information asymmetry between bankers and borrowers, financial counselors integrate social networks to establish bonds of trust and to accumulate social capital. The quality of the social bond determines the quality of the gathered information and therefore the quality of the risk evaluation. Bank management is aware of the limits of instrumental methods and the importance of social risk evaluation. To improve their economic efficiency, they modify their work organization and their management practices so as to facilitate the emergence of a bond of trust and the accumulation of social capital by their financial counselors. The analysis of economic actors’ speech and behavior involved in activities of credit shows that behind the claimed altruism nature of the trust relationship exists an economic rationality whose social and temporal horizons of optimization differ from the model of the trade exchange seen in conventional economic theory.     

“Trust Me”: Differences in expressed and perceived trust relations in an organization

The possibility of resolving the tension between trust as a psychological condition and trust as a general organizing principle depends on assumptions about the convergence of expressed and perceived trust relations. In empirical organizational research these assumptions are frequently left implicit and only rarely modeled directly. Using data that we have collected on trust relations within the top management team of a multiunit industrial group we specify and estimate multivariate exponential random graph models (ERGMs) that reveal important differences in the structural logics underlying networks of expressed and perceived trust relations. Results confirm that trust induces awareness and produces expectations of reciprocity – features that are consistent with the view of trust as a general organizing principle. Results also show that networks of perceived trust relations are characterized by tendencies toward reciprocity and generalized giving of trust. When multivariate network effects are introduced, however, expressed trust relations no longer show a significant tendency toward reciprocation. Interpreted together these results suggest that: (i) the distribution of expressed and perceived trust relations differs; (ii) expressed trust relations in organizations are more hierarchical than are perceived trust relations, and (iii) expressed and perceived trust relations need to be modeled jointly. These findings suggest caution in the adoption and interpretation of trust only as a general organizing principle, and suggest that psychological mechanisms also play an important role in the making and breaking of trust relations within organizations.     

Network formation in the interbank money market: An application of the actor-oriented model

This paper investigates the driving forces behind banks’ link formation in the interbank market by applying the stochastic actor oriented model (SAOM). Our data consists of quarterly networks constructed from the transactions on an electronic trading platform (e-MID) for interbank credit over the period from 2001 to 2010. The analysis strongly supports the hypothesis that the existence and extent of past credit relationships is a major determinant of credit provision (i.e., link formation) in subsequent periods. We also find explanatory power of size-related characteristics, but little influence of past interest rates. The actor-based analysis, thus, confirms the prevalent view that interbank credit is mainly determined by lasting business relationships and less so by competition for the best price (interest rate). Our findings also show that topological features exert a certain influence on the network formation process. The major changes found for the period after the onset of the financial crisis are that: (1) large banks and those identified as ‘core’ intermediaries became even more sought of as counterparties and (2) indirect counterparty risk appeared to be more of a concern as we find a higher tendency to avoid indirect exposure as indicated by clustering effects.     

A simple theory of ‘meso’. On the co-evolution of institutions and platform size—With an application to varieties of capitalism and ‘medium-sized’ countries

This paper deals with institutional emergence in the well-known ‘evolution of cooperation’ framework and focuses on its size dimension. It is argued that some ‘meso’ (rather than ‘macro’) level (to be numerically determined) is the proper level of cultural emergence, diffusion, and retention. Also Schumpeterian economists (K. Dopfer et al.) have discussed institutions as ‘meso’ phenomena, and Schelling, Axelrod, Arthur, Lindgren, and many others have dealt with ‘critical masses’ of coordinated agents, including related segregations of populations. However, the process and logic of emergent group size has rarely been explicitly explored so far. In this paper, ‘meso’ will be explained, in an evolutionary and game–theoretic frame and a population perspective, in terms of a cooperating group smaller than the whole population involved. Mechanisms such as memory, monitoring, reputation chains, and active partner selection will loosen the total connectivity of the deterministic ‘single-shot’ benchmark and thus allow for emergent ‘meso’-sized arenas, while expectations to meet a cooperative partner next round remain sufficiently high. Applications of ‘meso-nomia’ include the deep structure of ‘general trust’ and the surprisingly high macro-economic and macro-social performance in ‘small’ and ‘well-networked’ countries which helps to explain persistent ‘varieties of capitalism’. A strategy for empirical application of the theoretical approach and some first empirical indications of its relevance are presented.     

‘The whole is always smaller than its parts’ – a digital test of Gabriel Tardes' monads

In this paper we argue that the new availability of digital data sets allows one to revisit Gabriel Tarde's (1843–1904) social theory that entirely dispensed with using notions such as individual or society. Our argument is that when it was impossible, cumbersome or simply slow to assemble and to navigate through the masses of information on particular items, it made sense to treat data about social connections by defining two levels: one for the element, the other for the aggregates. But once we have the experience of following individuals through their connections (which is often the case with profiles) it might be more rewarding to begin navigating datasets without making the distinction between the level of individual component and that of aggregated structure. It becomes possible to give some credibility to Tarde's strange notion of ‘monads’. We claim that it is just this sort of navigational practice that is now made possible by digitally available databases and that such a practice could modify social theory if we could visualize this new type of exploration in a coherent way.     

Value for money: A utilization-focused approach to extending the foundation and contribution of economic evaluation

Value for Money (VfM) is an evaluative question about the merit, worth, and significance of resource use in social programs. Although VfM is a critical component of evidence-based programming, it is often overlooked or avoided by evaluators and decision-makers. A framework for evaluating VfM across the dimensions of economy, effectiveness, efficiency, and equity has emerged in response to limitations of traditional economic evaluation. This framework for assessing VfM integrates methods for engaging stakeholders in evaluative thinking to increase acceptance and utilization of evaluations that address questions of resource use. In this review, we synthesize literature on the VfM framework and position it within a broader theory of Utilization-Focused Evaluation (UFE). We then examine mechanisms through which the VfM framework may contribute to increased evaluation use. Finally, we outline avenues for future research on VfM evaluation.     

Markets or networks: Households’ choice of financial intermediary in Western China

We argue that households’ choice of financial intermediary is conditioned by households’ social network structures and socioeconomic status. Analyses show that households’ social network size and network composition affect their choices by limiting the quality and quantity of information, resources, and social influence one can access through social ties. Moreover, we find that high-SES families favor formal intermediaries due not only to their richer financial knowledge, higher affordability, and greater capacity to repay loans, but also to their high demands and special types of financial needs that can hardly be satisfied by embedded resources.     

Social Relations Model Analyses of Perceived Self‐Control and Trust in Families

How do people know which family member is trustworthy? In this study, the authors tested the hypothesis that people use their perception of a family member's self‐control as an indicator of his or her trustworthiness. Eighty‐four Dutch families consisting of 2 parents and 2 children completed questionnaires assessing each family member's trust in and perceived self‐control of the other 3 family members. This full‐family design enabled the authors to examine their hypothesis in horizontal relationships, between family members of equal status (i.e., parent–parent and sibling–sibling relationships), and vertical relationships, in which partners have unequal status (i.e., parent–child and child–parent relationships). Consistent with the hypothesis, Social Relations Model analyses showed that being perceived as having higher self‐control is related to greater trustworthiness among adults and children in the large majority of horizontal and vertical relationships (10 out of 12). These findings highlight that perceived self‐control is an important factor by which to gauge trustworthiness in families.     

Comparison at 32–37 Weeks Postconception of Infants Born 1983–1989 and 1995–2004 on the Neurobehavioral Assessment of the Preterm Infant

In spite of numerous recent outcome studies of extremely low birth weight (ELBW) infants, no data exist on their development prior to term. In this study we traced and compared the neurobehavioral development of 251 ELBW (< 1,000 g) and 240 low birth weight (LBW; 1,000 g–2,500 g) preterms born between 1995 and 2004 from 32 to 37 weeks postconceptional age (PCA), using the Neurobehavioral Assessment of the Preterm Infant (NAPI Korner & Thom, 1990). Compared to the original NAPI cohort of 521 infants (born 1983–1989), the ELBW and LBW infants were at higher medical risk, displayed weaker motor development, a tighter scarf sign and popliteal angle at all or most PCAs, and a weaker cry at older PCAs; they did not differ in irritability and percent asleep ratings. Few differences were noted between the ELBW and LBW groups. Research is now needed to determine whether the 1995 to 2004 NAPI values of ELBW and LBW infants at 32 to 37 weeks PCA are predictive of later outcome of high‐risk preterms.     

Monetary incentives,motivational orientation and affective commitment in contact centers. A multilevel mediation model

High quality contact and customer relationships are key services for all types of firms. To achieve this high quality performance standard, companies need highly motivated and committed employees, and human resources managers are responsible for designing and implementing practices capable of satisfying both economic exchanges and social exchanges in employee-organization relationships. The aim of this study is to analyze the relationships between monetary incentive expectation and affective commitment, in addition to the mediating role of motivation orientation in this relationship, in contact center employees. In particular, based on the social exchange theory (Blau, 1964), the social exchange model of Cropanzano and Mitchell (2005), and the self-determination theory (Deci, Olafsen, & Ryan, 2017), our study adopts a multilevel perspective to examine these relationships in a sample of 2367 contact center employees from 297 teams (3 or more members). The results showed that the level of performance-contingent rewards (team-level) guides the team’s autonomous motivation (team-level), which, in turn, fosters employees’ affective commitment (individual-level). The results have practical implications for human resource managers and for interventions aimed to promote contact center employees’ affective commitment, taking performance-contingent rewards into account.     

Trust,scepticism, and social order: A contribution from the sociology of scientific knowledge

The sociology of scientific knowledge (SSK), which studies the organisation and content of science, has made two original contributions to the understanding of social order at large. First, SSK scholars regard social order as a problem of establishing “cognitive order” and knowledge. A wealth of case studies has demonstrated that interpersonal trust is necessary to achieve agreement and shared perception among particular collectives of specialists. Second, SSK scholars insist that all types of cognitive order and knowledge, whether “scientific” or “lay,” are the result of socially organised scepticism being parasitic upon existing trust and background expectations (an argument that I call “the Parasitic View of Scepticism”). Sociologists with an interest in today's so‐called “knowledge” and “information” societies, and more specifically, in the social distribution and political uses of doubt and unknowns (including “post‐truth”), would benefit from adopting the Parasitic View of Scepticism and investigating the corrosive and generative consequences of scepticism on the trust relations and the cognitive/social order upon which it is based, in line with insights from the emerging fields of agnotology and the sociology of ignorance.     

Field Placement and the Impact of Financial Stress on Social Work and Human Service Students

While significant research has been undertaken exploring the pedagogical benefits of undertaking lengthy social work and human services field placements, there has been very little consideration given to the potential financial stress involved for students. This study sought to address this knowledge gap. Research was conducted in 2014 using quantitative and qualitative methods with students and academic and professional staff from six Queensland universities. The findings show a significant relationship between unpaid placements and financial hardship, creating considerable stress for students and at times a compromised placement learning experience. The limited flexibility in requirements from professional bodies and universities for how placements are undertaken has been identified as a key contributor to financial hardship. Addressing the complexities inherent in this issue requires a collaborative effort from multiple stakeholders and should not be regarded as a problem for students to endure and manage.