Represents a type of trust-guarding institution. It refers to a situation where two exchanging parties use a third (trusted) party to secure their own interactions.
Published in Chapter:
Trust and its Impersonal Nature
Miia Kosonen (Lappeenranta University of Technology, Finland), Kirsimarja Blomqvist (Lappeenranta University of Technology, Finland), and Riikka Ellonen (Lappeenranta University of Technology, Finland)
Copyright: © 2008
|Pages: 8
DOI: 10.4018/978-1-59904-885-7.ch222
Abstract
In the knowledge-based network economy, trust is becoming an increasingly important issue. Both economists (Arrow, 1974) and sociologists (Luhmann, 1979) have pointed at the role of trust as a lubricant in managing uncertainty, complexity, and related risks. Trust reduces transaction costs, and increases spontaneous sociability (see Creed & Miles, 1996; Kramer, 1999). Trust can also have a critical role in enhancing knowledge creation and transfer within the organizational context (Kogut & Zander, 1992; Grant, 1996). Trust is an intriguing and paradoxical issue: in the modern society we need trust more than ever, yet we have less natural opportunities for trust to evolve (Lahno, 2002; Blomqvist, 2005).