Trust, Delegation and Bounded Sociability

Also, independently from the new economic governance debate, academics have called for more systematic research into the role of trust in business relations, observing that: "It is clear that research on trust needs to advance beyond a catch-all residual in the unexplained random error" (Koza & Lewin, 1998, p. 85). But this is not an easy task, since there is not clarity around the concept of trust, itself. Regarding this gap, Mutti (1987) writes that, "the number of meanings attributed to the idea of trust in social analysis is disconcerting. Certainly this deplorable state of things is the product of a general theoretical negligence. It is almost as if, due to some strange self-reflecting mechanism, social science has ended up losing its own trust in the possibility of considering trust in a significant way" (p. 224, cited in Castaldo, 2002, p. 2).

The notion of trust is widely used in different social science disciplines, such as sociology, economics, strategic management, organization, marketing, psychology, but often with different meanings. Castaldo (2002) has recently meta-researched the trust literature, and concluded that there is a lack of a clear and shared definition of the trust concept, even within the business research community. He did a meta-analysis of the different (70) definitions of trust, statistically clustering them, and proposing a multilevel construct-frame. He considered the construct profile (belief, attitude, willingness), the subjects involved in the relation (person, firms, institution), their profile (honest, competent, benevolent, committed), the role of risk, opportunism and vulnerability, and the trusting behaviors. Even though not all of the studies hypothesized a direct causal relationship among these different variables, many placed them in a logical sequence: "This sequence often regards trust as the expectation, belief (and so on) that a subject with specific characteristics (honesty, benevolence, competencies, and so on) will perform actions designed to produce positive results in the future for the trustor, in situations of consistent perceived risk" (Castaldo, 2002, p. 8). Trust is mostly conceptualized as the heuristics (beliefs that drives action) that help rationally bounded agents take risky decisions. This heuristics in the definitions examined is more or less based on self-interest (contrasted to altruistic motivations) and based either on the evaluation of the personality characteristics of the trustee or on their rational motivation to act positively for the trustor. But, basically almost all of the authors consider trust as a cognitive tool or state, which we use to guide action in "the shadow of the future" (Axelrod, 1984). ^[7]

Castaldo (2002) shows that the words most used in the different definitions were: action, will, expectation, belief. Very interestingly, cooperation was one of the least used terms. These definitions have in our research framework important limitations:

• They do not analyse the difference between bonding and bridging trust (trust in friends and trust in strangers);

• They define trust as a state, a static phenomenon;

• They do not consider the economics of trust (there is no account for the costs of the invested resources in the process);

• They are only focused on the rational-choice dimension of trust and do not consider the unthinking, emergent evolutionary component of trust dynamics.

This is why Castelfranchi and Falcone's (1998, 1999) model of trust dynamics is helpful. We are particularly interested in their:

• Idea of trust as a dynamic process (trust builds trust),

• Conceptualization of trust as cooperation (trust requires the investment of social resources),

• Idea of trust as the antecedent of dynamic delegation (dynamic reduction of autonomy),

• Conceptualizations of trust as complex mediation (external trust builds internal trust).

According to their research, delegation necessarily is an action, a result of a decision, and it, too, creates and is a (social) relation among x, y, and z. They state that there may be trust without delegation in two situations: either the level of trust is not sufficient to delegate, or the level of trust would be sufficient, but there are other reasons preventing delegation (for example, prohibitions). "So, trust is normally necessary for delegation, but is not sufficient: delegation requires a richer decision. There may be delegation without trust: these are exceptional cases in which either the delegating agent is not free (coercive delegation) or he has no information and no alternative to delegating, so that he must just make a trial (blind delegation)" (Castelfranchi & Falcone, 1998, p. 3). We can conclude that trust drives cooperation, but this does not necessarily mean that trust in relationships lowers hierarchies.

Castelfranchi (1990) identifies two fundamental problems with studying social interaction in multi-agent systems:

• The Sociality Problem: why should autonomous agents enter into social interactions?

• The Adoption Problem: how can an agent get his problem to become social, i.e., get it adopted by other agents?" (p. 49).

Castelfranchi (1990) suggests that "dependence" is the informal answer to the sociality problem and power is the answer to the adoption problem. A "lack of power" concerning their own goals (their inability to achieve them by themselves alone, which makes other agents have "power over" them) makes agents dependent on other agents; these agents' power to influence someone else leads to goal adoption.

According to this conceptualization, trust is not the opposite of hierarchy, because trust is a form of hierarchy (cognitive selection). All cognitive hierarchies are at the same time selections (delegation, reduction of variation) and increase in diversity and freedom (symbolic value added by cognitive mediations). Mediation and delegation are not the same concepts, even though they are connected. Mediation, in our way of using this concept, focuses on the constructivist value added by symbolic interaction in cognitive and social encounters (cognitive and social associations). Delegation focuses on selection and complexity reduction.

Hierarchies are not all equal, since they are based on different forms of legitimacy of the mediation structures (Weber, 1919). The concept of social delegation to media and legitimated gatekeepers in mass communication research can fruitfully be associated to the concept of external trust in environments or third parties, who mediate the dynamics of delegation in Castelfranchi and Falcone (1999) (Figure 4).

Figure 4: Internal and External Sources of Trust (Adapted from Castelfranchi & Falcone, 1999)

^[7]Axelrod coined the phrase "shadow of the future" to describe the force that keeps a player cooperating, even when there is not immediate perceived utility coming out from this behavior, in light of future expected benefits.