1. Reputation and Trust

2. Uncertainty and Risk

3. 3 What are the Solutions to Uncertainty in the Social Environment?  Proxy’s and ‘inferred trustworthiness’ Herd behavior If everyone is using it, it has to be good…right?  Closed Systems versus Open Systems  3 rd party reputation is perhaps the most common solution What about when reputation is not possible (or practical)?

4. 4 Reputation as a Solution to the Problem of Uncertainty: Information Asymmetries  Problem of Lemons (Akerlof, 1970)  Information asymmetry in the marketplace

5. 5 What constitutes a reputation?  What they do…  Foster good behavior  Punish bad behavior  Reduce risk in long term  Transmission can be word-of-mouth, or more chronicled directly  Reputations concern people and organizations, not things.  To be effective, require clear criteria and incentives  Explicit or Implicit?

6. 6 Positive, Negative and Mixed Reputation Systems  Positive  Start at a baseline, can only go up.  Negative  Start at a baseline, can only go down.  Mixed  Start at a baseline, can go below or above baseline

7. 7 For 3 rd Party Reputations to Work...  Must have permanent identities.  Must make the feedback available for others to inspect.  Individuals have to actually pay attention to and use the reputations.

8. Trust and Trustworthiness

9. 9 Trustworthiness  Assessing Trustworthiness  Treated as a ‘characteristic’  Involves initial, one-shot interactions between parties  Theoretically linked to perceived competence and motivations of a given partner Competence to act in a way we deem appropriate Motivation to act in our best interests

10. Example Study Examining Trustworthiness: Online Sale Survey

12. 12 Assessing Trustworthiness  Tseng and Fogg (1999) [from Hertzum Anderson, et al]  First-hand experience  Reputation  Surface ‘attributes’  Stereotypes  First-hand experience is essential to building ‘trust’, as well as 3 rd party reputations  Surface ‘attributes’ and ‘stereotypes’ more accurately about assessing trustworthiness.

13. 13 Approaches to Trust Psychology  Trust as “personality trait” (dispositional trust)  Trust as learned experience (learned trust) Philosophy  Trust versus reliance and other concepts Sociology  Trust as behavior (situational trust) Through risk and uncertainty Other factors such as the medium (i.e., CMC) Perceptions based on characteristics: assessment of trustworthiness Trust as cognitive: It is reflected in attitudes about another’s desire and ability to act in a positive way towards us in a given context.

14. “Trust concerns a positive expectation regarding the behavior of somebody or something in a situation that entails risk to the trusting party.” “Trust exists whether it is explicitly recognized or not” (Marsh and Dibben)

15. 15 Trust-Building in Sociological Sense  Trust-building  Involves repeated interactions between parties  Theoretically linked to risk in the social exchange situation (e.g., what is at stake in the interaction?)  Trust is not the same as cooperation  Trust-building can involve various types of uncertainty, which is also distinct from risk. (e.g., how confident are we in a particular outcome?)

16. 16 Locus of Trust  Interpersonal Trust  Organizational Trust  Do organizations ‘trust’?  Society-level Trust  “general trust”

17. 17 Trust versus Reliance  Role of Betrayal  If we rely on someone to do something, if he/she/it does not do so we are disappointed. i.e., inanimate objects (car brakes, computer)  Role of ‘monitoring’ systems  Monitoring and surveillance of individuals: trust, distrust, or reliance?

18. 18 Trust in Information and Information Systems  “providers”  E.g., virtual agent representations  “trusted systems”  But is it really “trust” or just reliability?