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Distrust is a formal way of not trusting any one party too much in a situation of grave risk or deep doubt. It is commonly expressed in civics as a division or balance of powers, or in politics as means of validating treaty terms. Systems based on distrust simply divide the responsibility so that checks and balances can operate. The phrase "trust, but verify" refers specifically to distrust.
An electoral system inevitably is based on distrust, but not on mistrust. Parties compete in the system, but they do not compete to subvert the system itself, or gain bad faith advantage through it—if they do they are easily caught by the others. Much mistrust does exist between parties, and it is exactly this which motivates putting in place a formal system of distrust. Diplomatic protocol for instance, which applies between states, relies on such means as formal disapproval which in effect say "we do not trust that person". It also tends to rely on a strict etiquette—distrusting each person's habits to signal their intent, and instead relying on a global standard for behaviour in sensitive social settings.
Corporate governance relies on distrust insofar as the board is not to trust the reports it receives from management, but is empowered to investigate them, challenge them, and otherwise act on behalf of shareholders vs. managers. The fact that they rarely or never do so in most American companies is a sign that the distrust relationship has broken down—accounting scandals and calls for accounting reform are the inevitable result. It is precisely to avoid such larger crises of trust in "the system" that formal distrust measures are put in place to begin with.
A protocol as defined in computer science uses a more formal idea of distrust itself. Different parts of a system are not supposed to "trust" each other but rather perform specific assertions, requests and validations. Once these are passed, the responsibility for errors lies strictly with the receiving part of the system, not that which sent the original information. Applying this principle inside one program is called contract-based design.
Neuroeconomics explain how economists are attempting to understand why humans trust or distrust others by recording physiological measurements during trust experiments. [1] Economists conducted an experiment observing distrust through a trust game. Subjects were asked to anonymously donate various amounts of money to other anonymous subjects with no guarantee of receiving money in return. Various conditions were run of the experiment and after each decision, subjects' levels of the hormone dihydrotestosterone (DHT) were measured. The results of this experiment suggest men and women respond to distrust physiologically differently; a heightened level of the hormone DHT in men is associated with distrust. However, more research is needed in order to accurately state the correlation between the amount of DHT present in males and responses to distrust. [1]
It has been argued that by supporting healthy suspicion and vigilance, distrust does not always have detrimental consequences and can be related to positive outcomes. [2] It has been shown to increase the speed and performance of individuals and groups [3] at certain tasks. It has been empirically shown that distrust increases performance in nonroutine (creative, unstructured) tasks while decreasing performance in routine (cooperative, structured) tasks. [4]
Research on high-risk settings such as oil platforms, investment banking, medical surgery, aircraft piloting and nuclear powerplants has related distrust to failure avoidance. [5] [6] When nonroutine strategies are needed, distrusting persons perform better, while when routine strategies are needed trusting persons perform better. [7] This research was extended to entrepreneurial firms by Gudmundsson and Lechner. [8] They argued that in entrepreneurial firms, the prospect of failure is ever present, resembling nonroutine situations in high-risk settings. They found that the firms of distrusting entrepreneurs were more likely to survive than the firms of optimistic or overconfident entrepreneurs, because the distrusting entrepreneurs would emphasize failure avoidance through sensible task selection, and more analysis. [9] Kets de Vries has pointed out that distrusting entrepreneurs are more alert about their external environment. [10] Thus, distrusting entrepreneurs are less likely to discount negative events, and are more likely to engage control mechanisms. [8] [11] [10] [12] Thus, according to Gudmundsson and Lechner distrust leads to higher precaution and therefore increases chances of entrepreneurial firm survival. [8]
The term Homo economicus, or economic man, is the portrayal of humans as agents who are consistently rational and narrowly self-interested, and who pursue their subjectively defined ends optimally. It is a wordplay on Homo sapiens, used in some economic theories and in pedagogy.
Vernon Lomax Smith is an American economist who is currently a professor of economics and law at Chapman University. He was formerly the McLellan/Regent’s Professor of Economics at the University of Arizona, a professor of economics and law at George Mason University, and a board member of the Mercatus Center. Along with Daniel Kahneman, Smith won the 2002 Nobel Memorial Prize in Economic Sciences for his contributions to behavioral economics and his work in the field of experimental economics, which helped establish “laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”.
Behavioral economics is the study of the psychological, cognitive, emotional, cultural and social factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by classical economic theory.
Organizational culture refers to culture related to organizations including schools, universities, not-for-profit groups, government agencies, and business entities. Alternative terms include corporate culture and company culture. The term corporate culture emerged in the late 1980s and early 1990s. It was used by managers, sociologists, and organizational theorists in the 1980s.
An academic discipline or field of study is a branch of knowledge, taught and researched as part of higher education. A scholar's discipline is commonly defined by the university faculties and learned societies to which they belong and the academic journals in which they publish research.
Neuroeconomics is an interdisciplinary field that seeks to explain human decision-making, the ability to process multiple alternatives and to follow through on a plan of action. It studies how economic behavior can shape our understanding of the brain, and how neuroscientific discoveries can guide models of economics.
An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims.
Trust is the belief that another person will do what is expected. It brings with it a willingness for one party to become vulnerable to another party, on the presumption that the trustee will act in ways that benefit the trustor. In addition, the trustor does not have control over the actions of the trustee. Scholars distinguish between generalized trust, which is the extension of trust to a relatively large circle of unfamiliar others, and particularized trust, which is contingent on a specific situation or a specific relationship.
In psychology and sociology, a trust metric is a measurement or metric of the degree to which one social actor trusts another social actor. Trust metrics may be abstracted in a manner that can be implemented on computers, making them of interest for the study and engineering of virtual communities, such as Friendster and LiveJournal.
A family business is a commercial organization in which decision-making is influenced by multiple generations of a family, related by blood, marriage or adoption, who has both the ability to influence the vision of the business and the willingness to use this ability to pursue distinctive goals. They are closely identified with the firm through leadership or ownership. Owner-manager entrepreneurial firms are not considered to be family businesses because they lack the multi-generational dimension and family influence that create the unique dynamics and relationships of family businesses.
The dictator game is a popular experimental instrument in social psychology and economics, a derivative of the ultimatum game. The term "game" is a misnomer because it captures a decision by a single player: to send money to another or not. Thus, the dictator has the most power and holds the preferred position in this “game.” Although the “dictator” has the most power and presents a take it or leave it offer, the game has mixed results based on different behavioral attributes. The results – where most "dictators" choose to send money – evidence the role of fairness and norms in economic behavior, and undermine the assumption of narrow self-interest when given the opportunity to maximise one's own profits.
Neuromarketing is a commercial marketing communication field that applies neuropsychology to market research, studying consumers' sensorimotor, cognitive, and affective responses to marketing stimuli. The potential benefits to marketers include more efficient and effective marketing campaigns and strategies, fewer product and campaign failures, and ultimately the manipulation of the real needs and wants of people to suit the needs and wants of marketing interests.
Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. Intrapreneurship is known as the practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship. Corporate entrepreneurship is a more general term referring to entrepreneurial actions taking place within an existing organization whereas Intrapreneurship refers to individual activities and behaviors.
Paul J. Zak is an American neuroeconomist.
Entrepreneurship is the creation or extraction of economic value in ways that generally entail beyond the minimal amount of risk, and potentially involving values besides simply economic ones.
Trust management deals with how people or groups determine who or what to trust.
Physioeconomics is an extension of experimental economics research that collects physiological parameters in addition to recording behavior. These measures can include skin conductance, blood pressure and the pulse of the subject. Experiments typically present subjects with economic decisions in a game–like context.
Swift trust is a form of trust occurring in temporary organizational structures, which can include quick starting groups or teams. It was first explored by Debra Meyerson and colleagues in 1996. In swift trust theory, a group or team assumes trust initially, and later verifies and adjusts trust beliefs accordingly.
Neuromanagement uses cognitive neuroscience, among other life science fields, and technology to analyze economic and managerial issues. It focuses on exploring human brain activities and mental processes when people are faced with typical problems of economics and management. This research provides insight into human decision-making and other general social behavior. The main research areas include decision neuroscience, neuroeconomics, neuromarketing, neuro-industrial engineering, and neuro-information systems. Neuromanagement was first proposed in 2006 by Professor Qingguo Ma, the director of Neuromanagement Laboratory of Zhejiang University.
Yaacov Schul is an Israeli professor of cognitive and social psychology at the Hebrew University of Jerusalem.
