Trust (economy)

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In economics , trust plays a role in a large number of sub-disciplines and related disciplines. However, depending on the question (e.g. trust in the company versus trust in the currency) and research method (e.g. game theory, experimental or survey-based approach) there are inevitably differences in the underlying definitions and theories. In this respect, there is no uniform theory of trust in economics, but rather a kind of “core definition” of trust as a starting point from which various parallel research programs then proceed. The common conceptual bracket is based on the essential properties of trust, which can be generalized for a wide range of trust contexts. Accordingly, trust is an expectation to the effect that - despite a certain risk - one can get involved in (and rely on) the social environment.


Transactions play a central role in economics . What they have in common is that at least two people are always involved and the performance of one is offset by the consideration of the other. The basic condition of any transaction is sufficient confidence that the other will also provide something in return.

So the seller trusts the buyer that the buyer will pay the purchase price. In return, the buyer trusts the seller that the goods have the warranted properties.

It is obvious that this trust can also be disappointed. In this case (which takes place with a certain probability) the transaction partner incurs costs (e.g. the irrecoverable purchase price).

Conversely, a (correctly executed) transaction creates a benefit. Only if this benefit is higher than the expected value of the possible abuse of trust will the trust be sufficient to carry out the transaction.

The trust, i.e. the willingness of a trusting person (A) to rely on the action of another (B), can be formally represented as follows:

According to the calculus of probability :

in which

= Probability (often based on the subjective assessment of A) that B will carry out or select action x
= Action that B should perform
= not x, ie an action that B carries out and thus abuses trust
= Payment / profit for / by the act x
= Loss caused by action y

If you want to determine the necessary trust, the formula is transformed :


A bank wants to give a customer a loan of € 10,000. The bank would earn € 1,000 from the loan - if the customer repays it in accordance with the contract. It is uncertain whether the customer will do this. The bank knows from its experience in the lending business that 3% of customers do not repay their loans when it comes to installment loans. If the customer does not repay, the bank loses the loaned capital.

= Probability of correct repayment = 97%
= Probability that the customer will abuse the trust and not pay = 3%
= Profit on repayment = € 1,000
= Loss on non-refund = € 10,000

Trust = 0.97 × € 1,000 - 0.03 × € 10,000 = € 970 (interest income) - € 300 (risk costs) = € 670

Since the return is higher than the costs in the example, the bank will have the confidence to grant the loan.

The previous example shows that trust has both a decision-making and a strategic or interactive component. To this extent, trust represents a special decision under risk, in which the social risk or behavioral risk of an interaction partner plays a role. For these reasons, trust decisions - depending on the question - can be investigated using the methods of decision theory and game theory.

Decision theory

In decision theory, the main question is which (1) factors influencing the decision-making situation (e.g. degree of conflict of interest, symmetrical or asymmetrical level of information) and (2) which personality factors on the part of the trust-giver (e.g. social risk tolerance, cognitive dissonance, etc.) .) be able to justify trusting behavior. Since the trusting person usually looks for signals from which they can derive information about the trustworthiness of their counterpart, the trust decision also always has an epistemic, i.e. information-based, level. These include categories such as basic trust and category-based trust.

Game theory

In game theory , the focus is on the interaction with the recipient of the trust, which is analyzed using the model of the trust game . In the context of the game of trust, the willingness (= probability for a trusting decision) as well as the intensity (= amount of the risked advance payment) are higher, the (1) lower the conflict of interest between trust-giver (VG) and trust-taker (UN) is; (2) the flow of information between the VG and VN is more intensive; (3) the communication between VG and VN is smoother; (4) VG and VN interact with each other more often (repeated play); (5) the moral commitment (e.g. orientation to social norms) is more pronounced in both. Depending on which trust basis is to be analyzed, the simple trust game can be modified in a wide variety of ways (e.g. variation of the conflict of interest, the information structure, the time structure, etc.). In addition, there are other sub-disciplines of game theory, such as B. behavior-oriented game theory, psychological game theory and evolutionary game theory. Each sub-discipline enables a better explanation for different bases of trust. The behavior-oriented game theory gives better insight into the complexity of (pro) social motivations, because it leaves the conventional self-interest assumption of economics, which is usually obstructive in the context of trust. Psychological game theory enables a more realistic representation of the effect of expectations and the formation of expectations. Evolutionary game theory provides arguments for the long-term advantage of trustworthy and trustworthy behaviors.

Measures to increase confidence

The higher the level of trust, the easier it is to gain transaction partners and the better conditions can be achieved on the market.

This is particularly evident in the capital markets . Depending on the confidence in the creditworthiness of the issuer of securities , a different risk premium is demanded in the markets .

For this reason, economic players have always tried to increase their trust in one another.

Institutions and legal system

Functioning institutions (e.g. courts, chambers of commerce , standardization institutes) are an essential element of trust . Above all, this includes the rule of law . Only by means of these institutions is it possible for the economic operator to sanction a possible breach of trust on the part of the other. The possibility of sanctions in turn increases the necessary trust. In this context it is essential that economic actors themselves have institutional trust.

External exams

A major problem in building trust is the asymmetrical distribution of information . For example, the seller knows about defects in the object of sale, but the buyer does not. In order to increase confidence, external auditors are often used here. This significantly increases the confidence of the used car buyer when a current TÜV report is available. Typical cases of such external reviews are ratings of securities or borrowers.

Banking and insurance business

Credit institutions are particularly dependent on trust. The term credit comes from the Latin credere (= to believe). The lender believes that the borrower will pay back the loan. It is therefore imperative for banks to maintain a high level of trust from depositors. If the investors lose confidence in the bank, they withdraw the deposits and there are liquidity problems and even bank runs .

For this reason, banks have set up extensive deposit protection systems .

The same applies to insurance. Here, as in the banking sector, having sufficient equity capital plays a central role in maintaining customer confidence in the company's creditworthiness .


The “trust” construct is particularly important in the context of marketing and sales . In product policy decisions, for example, trust properties play a major role, in pricing, in turn, price trust (expectation that a company will only set the price for itself). In distribution policy, trust in the sales channels determines the success of a product (e.g. trust in new media or the trade of goods on the Internet) and communication policy has to deal with a low level of trust in the statements made by advertising. Ultimately, trust is also decisive in brand management: there, brand trust is one of the key factors influencing customer loyalty or brand loyalty . Relevant empirical studies are already available.


Other factors also play a role in electronic commerce. A lack of face-to-face interaction, the lack of verifiability of given information and the technological act itself make it difficult to build trust. As a result, trusted third parties are becoming increasingly important in online business. However, the perceived risk is also important, as this may determine a. About the type of trust building (i.e. whether there is a complex search for indications of trustworthiness or whether the trust is granted spontaneously on the basis of heuristics). Both are also relevant in contexts other than de, e-commerce, but have a different meaning due to the lack of face-to-face interaction in e-commerce. Trust in e-commerce also seems to depend on cultural factors.

Other authors

Since the 1980s in particular, economics has dealt intensively with the topic (important authors: Oliver E. Williamson (1993), Tanja Ripperger (1998), Michael Platzköster (1990)), but business management does not save on publication either (especially in the area of des Organizational Behavior, e.g. Bart Noteboom / Frederique Six (2003), Roderick Kramer / Tom Tyler (1996), Roderick Kramer (2005), Guido Möllering (2006), Reinhard Bachmann / Akbar Zaheer (2006)). Marcus Wiens (2013) extends conventional methods of decision theory and game theory with psychological and behavioral findings.


  1. James Samuel Coleman : Fundamentals of Social Theory , 1991
  2. Marcus Wiens (2013): Trust in Economic Theory - A Microfounded and Behavioral Analysis , 2013
  3. see e.g. B. Peter Ludwig (2005)
  4. Aladin El-Mafaalani : Global Trade in a Local Way , 2008