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Trust across Disciplines

Risk in trust - Regarding psychology

Since the early years of studies about trust, risk has been considered one of the closest elements to the trust concept and one of the most important factors that lead trust decisions.

Psychology approached the topic focusing on risk inclination as one of the characteristics of every individual. In this perspective we can have people who are inclined to risk more and people who are cautious and distrustful.

Morton Deutsch

Trusting behaviour occurs when an individual perceives an ambiguous path, the result of which could be good or bad, and the occurrence of the good or bad result is contingent on the actions of another person; finally, the bad result is more harming than the good result is beneficial. If the individual chooses to go down that path, he can be said to have made a trusting choice, if not, he is distrustful. [...]

The use of the word 'perceives' many times in this definition implies that trust is a subjective, or agent-centred notion, one in which the choices that are made are based on subjective views of the world. [...] If trust is based on individual perception, it is likely that in any one situation, different agents will see the situation differently. [...]

Trusting decisions are based on some form of cost/benefit analysis. [...] Under which circumstances is one prepared to make a decision where the potential negative consequences outweigh the potential positive consequences?

Deutsch formed a list of trustful decision and risk-taking situations: trust as despair, trust as social conformity, trust as innocence, trust as impulsiveness, trust as virtues, trust as masochism, trust as faith, trust as confidence.

Regarding to risk-taking and gambling, Deutsch wrote that if the potential gains of winning are subjectively far greater than the potential losses from losing, even should the risk be great, the gambling suitor would be prepared to take that risk - life may not be worth living without the lady in any case, and so the risk is worth taking. It should be noted, though, that these estimates of chances and magnitudes of losses or gains are subjective, and thus some gamblers may take ill-advised risks, acting as though they are gambling when, in fact, they are trusting ill-advisedly.

References

Marsh, S. P. (1994). Formalising Trust as a Computational Concept. PhD thesis, Department of Computing Science and Mathematics. University of Stirling.

Deutsch, Morton. (1962). Cooperation and Trust: Some Theoretical Notes. In Jones, M. R. (ed.), Nebraska Symposium on Motivation. Nebraska University Press.

If you like to read more about Deutsch's analysis of trust and distrust, read a brief summary on the mental attitudes in trust regarding psycology.

Other perspectives on risk

This topic is studied also in economics and sociology. Our socio-cognitive approach is close to the sociological view of the relationship between risk and trust and is critic to the (rather semplicistic, in our opinion) economic theory: read Castelfranchi and Falsone's paper about the implications of risky decision and the contribution of cognitive theory on the topic.