IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v57y2011i2p393-412.html
   My bibliography  Save this article

"I Think You Think I Think You're Lying": The Interactive Epistemology of Trust in Social Networks

Author

Listed:
  • Mihnea C. Moldoveanu

    (Desautels Centre for Intregrative Thinking, Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Joel A. C. Baum

    (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

Abstract

We investigate the epistemology of trust in social networks. We posit trust as a special epistemic state that depends on actors' beliefs about each others' beliefs as well as about states of the world. It offers new ideas and tools for representing the core elements of trust both within dyads and larger groups and presents an approach that makes trust measurable in a noncircular and predictive, rather than merely postdictive, fashion. After advancing arguments for the importance of interactive belief systems to the successful coordination of behavior, we tune our investigation of trust by focusing on beliefs that are important to mobilization and coordination and show how trust functions to influence social capital arising from network structure. We present empirical evidence corroborating the importance of higher-order beliefs to understanding trust and the interactive analysis of trust to the likelihood of successful coordination. This paper was accepted by Jesper Sørensen, organizations and social networks.

Suggested Citation

  • Mihnea C. Moldoveanu & Joel A. C. Baum, 2011. ""I Think You Think I Think You're Lying": The Interactive Epistemology of Trust in Social Networks," Management Science, INFORMS, vol. 57(2), pages 393-412, February.
    • Handle: RePEc:inm:ormnsc:v:57:y:2011:i:2:p:393-412
    DOI: 10.1287/mnsc.1100.1279
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.1100.1279
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.1100.1279?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jay B. Barney & Mark H. Hansen, 1994. "Trustworthiness as a Source of Competitive Advantage," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 175-190, December.
    2. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters, in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136, World Scientific Publishing Co. Pte. Ltd..
    3. Michael Suk-Young Chwe, 2000. "Communication and Coordination in Social Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(1), pages 1-16.
    4. Adam Brandenburger, 1992. "Knowledge and Equilibrium in Games," Journal of Economic Perspectives, American Economic Association, vol. 6(4), pages 83-101, Fall.
    5. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
    6. Moldoveanu, M. C. & Stevenson, H., 1998. "Ethical universals in practice: An analysis of five principles," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 27(6), pages 721-752.
    7. Ronald S. Burt & Marc Knez, 1995. "Kinds of Third-Party Effects on Trust," Rationality and Society, , vol. 7(3), pages 255-292, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiang, Meiling & Gao, Qingwu & Zhuang, Jun, 2021. "Reciprocal spreading and debunking processes of online misinformation: A new rumor spreading–debunking model with a case study," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 565(C).
    2. Daske, Thomas, 2017. "Friends and Foes at Work: Assigning Teams in a Social Network," EconStor Preprints 172493, ZBW - Leibniz Information Centre for Economics.
    3. Carlos Sáenz-Royo & Carlos Gracia-Lázaro & Yamir Moreno, 2015. "The Role of the Organization Structure in the Diffusion of Innovations," PLOS ONE, Public Library of Science, vol. 10(5), pages 1-13, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yannai A. Gonczarowski & Yoram Moses, 2023. "Common Knowledge, Regained," Papers 2311.04374, arXiv.org, revised Apr 2024.
    2. Marchiori, Davide & Di Guida, Sibilla & Polonio, Luca, 2021. "Plasticity of strategic sophistication in interactive decision-making," Journal of Economic Theory, Elsevier, vol. 196(C).
    3. Robert Grafstein, 2002. "What Rational Political Actors Can Expect," Journal of Theoretical Politics, , vol. 14(2), pages 139-165, April.
    4. Kin Chung Lo, 1998. "Epistemic Conditions for Agreement and Stochastic Independence of epsilon-Contaminated Beliefs," Working Papers 1998_02, York University, Department of Economics.
    5. Nilsson, Magnus & Mattes, Jannika, 2015. "The spatiality of trust: Factors influencing the creation of trust and the role of face-to-face contacts," European Management Journal, Elsevier, vol. 33(4), pages 230-244.
    6. Kris De Jaegher, 2016. "Endogenous thresholds and assurance networks in collective action," Rationality and Society, , vol. 28(2), pages 202-252, May.
    7. Lo, Kin Chung, 2000. "Epistemic conditions for agreement and stochastic independence of [epsi]-contaminated beliefs," Mathematical Social Sciences, Elsevier, vol. 39(2), pages 207-234, March.
    8. John Hillas & Elon Kohlberg, 1996. "Foundations of Strategic Equilibrium," Game Theory and Information 9606002, University Library of Munich, Germany, revised 18 Sep 1996.
    9. Zambrano, Eduardo, 2008. "Epistemic conditions for rationalizability," Games and Economic Behavior, Elsevier, vol. 63(1), pages 395-405, May.
    10. Huang, Li & Murnighan, J. Keith, 2010. "What's in a name? Subliminally activating trusting behavior," Organizational Behavior and Human Decision Processes, Elsevier, vol. 111(1), pages 62-70, January.
    11. Bach, Christian W. & Cabessa, Jérémie, 2023. "Lexicographic agreeing to disagree and perfect equilibrium," Journal of Mathematical Economics, Elsevier, vol. 109(C).
    12. Costa-Gomes, Miguel & Crawford, Vincent P & Broseta, Bruno, 2001. "Cognition and Behavior in Normal-Form Games: An Experimental Study," Econometrica, Econometric Society, vol. 69(5), pages 1193-1235, September.
    13. Lo, Kin Chung, 1996. "Equilibrium in Beliefs under Uncertainty," Journal of Economic Theory, Elsevier, vol. 71(2), pages 443-484, November.
    14. Nilsson, Magnus & Mattes, Jannika, 2013. "The spatiality of trust – Antecedents of trust and the role of face-to-face contacts," Papers in Innovation Studies 2013/16, Lund University, CIRCLE - Centre for Innovation Research.
    15. Emiliano Lorini & François Schwarzentruber, 2010. "A Modal Logic of Epistemic Games," Games, MDPI, vol. 1(4), pages 1-49, November.
    16. Prommer, Lisa & Tiberius, Victor & Kraus, Sascha, 2020. "Exploring the future of startup leadership development," Journal of Business Venturing Insights, Elsevier, vol. 14(C).
    17. Alioğulları, Zeynel Harun & Barlo, Mehmet, 2012. "Entropic selection of Nash equilibrium," MPRA Paper 37132, University Library of Munich, Germany.
    18. Junyon Im & Sunny Sun, 2015. "Profits and outreach to the poor: The institutional logics of microfinance institutions," Asia Pacific Journal of Management, Springer, vol. 32(1), pages 95-117, March.
    19. Renou, Ludovic & Schlag, Karl H., 2010. "Minimax regret and strategic uncertainty," Journal of Economic Theory, Elsevier, vol. 145(1), pages 264-286, January.
    20. Mezzetti, Claudio & Renou, Ludovic, 2012. "Implementation in mixed Nash equilibrium," Journal of Economic Theory, Elsevier, vol. 147(6), pages 2357-2375.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:57:y:2011:i:2:p:393-412. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.