The Economic Psychology of Trust

As firms seek to use the knowledge held in their far-flung enterprises, their size and diversity – the very qualities that offer so much promise – become hindrances. This research explores how trust can shift the psychological levers that drive knowledge-sharing in powerful ways. Tam Thao Pham presents a model based on an "economic psychology" extending beyond the narrowly rational. She posits the use of economic reasoning in sharing, i.e. daily tradeoffs that are weighed and made to optimize the scarce resource of time, which also includes psycho- sociological factors - such as the human desire to build relationships, power of social status, and need for coherent self-identity. She tracks outgoing streams from 35 consultants and asks questions about the implicit relationships between sender and recipient. The results suggest answers to questions like: Is there a “virtuous cycle” of trust and knowledge-sharing? How important is physical proximity? What is different in technology-enabled environments? What is the difference between sharing “up” versus “down”? And why can''t we look at proactive sharing and passive acquiescing in the same way?