By William D. Nelson
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Extra resources for Advances in Business & Management: Volume 2 (Advances in Business and Management)
In this respect, the question also arises to what extent both types of trust rely on rational behaviour or not. Here the distinction can be made between calculative trust and moral trust. Apparently formal trust can be associated with calculative trust and rational behaviour. But it may be true that reliance on informal trust can also be regarded as rational. Rationality, in this case, refers to a balancing of benefits and costs of cheating. For instance, when it has been very costly to build up a reputation of trustworthiness, and when by cheating this reputation gets lost whereas keeping the reputation will considerably reduce future transaction costs, it becomes rational not to cheat.
Berg, J, J. Dickhaut and K. 122-142. Transaction Management: Value Creation by Reducing Transaction Costs 31 Berghuis, E. G. den Butter, 2009 Veranderende wereldhandelspatronen door globalisering (Changing patterns of world trade trough globalisation) , Economisch Statistische Berichten, 94, pp. 134-137. , H. Garretsen and Ch. van Marrewijk, 2008, Nobelprijs economie voor Paul Krugman (the Nobel prize in economics for Paul Krugman), Economisch Statistische Berichten, 93, pp. 660-663. G. J. Mosch, 2003, Trade, trust and transaction costs, Tinbergen Institute Discussion Paper TI 2003-082/3.
Trust problems are a source of trade barriers and transaction costs. More trust means less trade barriers and less transaction costs. Thus, more trust leads to more trade. 2. Two types of trust can be distinguished: formal trust and informal trust. Both types are important in international trade. 3. Another distinction is between calculative trust and moral trust. Although at first sight calculative trust, which is considered to stem from rational behaviour, seems to be linked to formal trust, whereas informal trust can be identified with moral trust, this may not be true.
Advances in Business & Management: Volume 2 (Advances in Business and Management) by William D. Nelson