This term, I asked my students on their exam to give me one strong argument about the benefits of trust and the costs of distrust.

Nobody mentioned the Doritos Loco Taco.

But the Doritos-shelled taco, that neon-orange fast-food abomination, offers a vivid example of the power of incomplete contracts and trust in allowing cooperation to occur.

Frito-Lay and Taco Bell collaborated for years in developing the technology that would ultimately produce this nacho-taco amalgam, and did so without formal contracting in place:

“While buzz for the DLT’s national launch was locked in, a deal between Taco Bell and Frito-Lay was not. As Taco Bell legend has it, though the companies had spent years working together on the DLT, no official contracts had ever been signed. Taco Bell’s 50th birthday was fast approaching when Greg Creed and then-Frito-Lay CEO Al Carey met in Creed’s office to hash out final details. “We both realized that if we let the lawyers get involved, this thing would get slowed down and bogged down. So we did a handshake deal–that’s all we had: You’re going to spend the money, and I’m going to spend the money [on the DLT],” Creed recalls. “Everyone was like, ‘You can’t launch without a contract.’ And we were like, ‘Just watch us.’”

The upshot of this approach?

“When we met in my office [before launch], we said that if either one of us gets sacked or promoted, we would actually have to write a contract,” Creed recalls. “When [then-Frito-Lay CEO] Al [Carey] got promoted to run the PepsiCo beverage business, I phoned him up and said, ‘So I guess we better write that contract then.’ Well guess what? We sold 100 million tacos in the first 70 days. If we waited for those contracts to be finished, we would’ve sold 100 million less.”

 

So, when someone next asks you:  What’s responsible for America’s obesity epidemic?  You can now confidently answer:  Incomplete contracts and trust.

“Imagine this thought experiment:

The entire editorial board of Journal X decides to quit and start a new open-source journal. Any expenses of that new journal could be funded by a university. Overnight, the new journal would BE, for all practical purposes, the exact same journal (with a new name) – at least in terms of what we should primarily care about, which is the quality of the research. Would it be that expensive to get such a new journal listed so that it appears on Google Scholar? Where are all these valuable marketing costs that supposedly exist? Seth Spain pointed out that this thought experiment actually happened in mathematics. The board of the journal Topology resigned and founded the Journal of Topology.”

– Marc Anderson on the OB-list, mulling over alternatives to  OBHDP’s $1,800 fee to make a paper open-access.

I would love to see OBHDP and other outlets reinvent themselves as online open journals, keeping the same ed board, AEs, reviewers, standards, publication schedule, etc., and simply cutting Sage, Elsevier and the other publishing giants out entirely.

I suspect that one of the biggest resources such rebellions would require is a simple, open-source, free to use piece of web software to duplicate the functions of ManuscriptCentral:  Submitting papers, assigning them to AEs and reviewers, tracking reviews, sending out decisions, submitting R&Rs, etc.

It would be great to see a large capacity-building grant (from CFI here in Canada, for instance, or the US NSF’s academic research infrastructure program) to build the basic submission-management and publishing tools necessary for journals’ boards to free themselves from publishers.

I can’t imagine a more profoundly and positively disruptive project for academic research than a piece of ‘journal-in-a-box’ software that would allow societies to escape their publishers and cheaply and easily take their existing journals open-access.

Update:  Spoke too soon!   There’s an OS journal workflow management tool already available (thanks, @mekki and @TIMReview).  It’s called OJS, Open Journal Systems.  Maybe there are tech issues inhibiting uptake (Journal of Management and Organization used OJS, but then returned to ManuscriptCentral), but I think the availability of this software probably undermines my technological-barriers argument about why ed boards don’t rise up and overthrow their publishers.  Next guess, anyone?

A roundup of some interesting recent findings about the predictors and roots of trust and trustworthy behaviour:

• Moral judgment.  Those who make moral judgments behave in more trustworthy ways, and are more likely to expect trustworthy behaviour from others.
• Age.  We become trustors sometime between kindergarden and elementary school, research suggests — possibly because older children become more aware of the possibility of reciprocity that makes trust pay off.
• Lower testosterone.  That big hairy fella with the rugged jawline?  Probably not as trusting.  People with higher testosterone tend to be higher in “indiscriminate social suspicion“.
• Racial integration.  People from areas with greater racial integration tend to be less distrusting than those who live in racially-segregated cities, some US data suggest.  Score another point for the contact hypothesis.

In a famous experiment I’ve mentioned here before, you get different results when an economic game is titled the ‘Community Game’, versus the ‘Wall Street Game’.  Despite the exact same rules, structure, and payoffs, the frame changes the game:  Wall Street players cooperate less than Community Game players.

But, Alex Tabarrok at Marginal Revolution points out some recent results that suggest that it may be Wall Street in particular that is triggering suspicion, not markets in general.  The study described over at MR primed markets in a different way, getting participants to rearrange sentences that had words related to markets, commerce and trade:  ”Paid”, “commercial”, “shop”, etc.  (A control group of participants rearranged similar sentences with different, non-market words).

What they found was that priming markets increased players’ trusting behaviour in an economic trust game.  It’s hard to know from their results whether this is really trust, or simply willingness to take on risk.  Perhaps both market-primed and non-market-primed players are equally suspicious of their partner in the game, but market-primed players are more willing to gamble.

Though more work probably remains, it’s an interesting result, and suggest to me that it’s worth thinking carefully about the distinction between markets and business when we think of economic influences on trust.

Edit:  Via Thomas Zeitzoff, another interesting related paper in Science:   In behavioural games, players in societies with well-developed markets (operationalized in terms of how much of your food is purchased rather than grown yourself) tend to play with greater concern for fairness.

How does being trusted make you feel?  So much of contemporary life seems designed to make you feel distrusted:  The big-box employee checking your receipt as you leave the store.  The piles of legal boilerplate firms will make you sign to prove you’re going to keep your mouth shut about their trade secrets.  The keylogger your employer installs on your work computer to make sure you’re not goofing off.

Late last year, though, I had a very different experience at a Stella’s near my office on campus.  After having lunch, I went to pay, and found that the store’s debit-credit machine was on the fritz.  Having no cash on me, I was in a bind.  I started suggesting options — I could leave my driver’s license as collateral and run to an ABM, and then — when the server cut me off.  ”Don’t worry about it.  Just give me a call with your card number later, and we’ll run it through then.”  I asked whether she wanted to write down my name, or take a business card.  No on both fronts.  I ate my meal, left without paying, and they took my promise to settle up at face value.

After calling in to pay, I asked the manager about what usually happened when this kind of problem occurred.  Some customers would sprint to an ATM while others would take weeks to pay it back, but only two people in the manager’s memory had ever failed outright to return and pay for their meal.

There’s less research than there ought to be about mutual trust and feeling trusted (most research still focuses on why we trust others, rather than the experience of being trusted), but the evidence suggests that there are some pretty substantial benefits to making people feel trusted.

Sabrina Deutsch Salamon, for instance, looked at employees in 88 retail stores.  When employees collectively felt that they were trusted by their managers, they were more likely to endorse “responsibility norms” (feeling accountable for the store, for instance).  These responsibility norms, in turn, predicted the employees’ performance in sales and customer-service.

Of course, there’s a Pygmalion effect at play:  Those who are trusted are more likely to be charged with the resources and tools to do a good job.  But there’s also a powerful influence of others’ expectations on our own choices.  When we’re presumed to be shoplifters, swindlers and slackers, we feel less bad engaging in those behaviours.  But when people show their trust in us, we often respond by trying to prove them right; trying to show that the unearned trust placed in us is in fact warranted.

Teaching this term, of course, this leaves me with a challenge.  Exams and quizzes, being beset by issues of cheating and plagiarism, have developed an apparatus around them to monitor and control student behaviour.  The message that is very clearly sent is this:  You aren’t to be trusted, and we’re keeping an eye on you.   If you reflect on your own work, in what subtle ways do you communicate to those around you that they are trusted or distrusted?

Related:  Trust and the Crunchpad

Trust tends to flourish when we share bonds.  And one particularly potent bond, it turns out, is our sense of shared victimhood.

Katie Rotella, a doctoral student at Northwestern University, provides a convincing demonstration of this effect in a new paper in Personality and Social Psychology Bulletin.  In a series of experiments, she and her colleagues brought participants into a psychology lab, where they were provided with information that emphasized their shared group victimhood.

For instance, the Jewish participants in one study read materials emphasizing the centrality of the holocaust and pogroms in shaping the Jewish identity.  In another study, conservative students were given information suggesting conservatism was in decline and public hostility to conservatives was rising.

Afterwards, they compared how participants played a trust game with ingroup versus outgroup members.  For Jewish players, the game involved a fellow Jewish player or a gentile; for conservative players, their partner was either a fellow conservative or a liberal.  (The Trust Game, which I’ve mentioned on this blog before, is a way of measuring trusting behaviour:  It gives players money, which they can pass or keep.  Passed money gets multiplied, which means there’s a potential to gain — but it also means having to count on your partner to do the right thing and share the proceeds.  The more you trust, the more you’ll pass.)

Here’s what they found:  When group victimhood was stressed, participants trusted outgroup members no less.  But they trusted their fellow ingroup members significantly more.  Jewish players passed more to jewish players; conservatives to conservatives.   It’s a bit of a narrow, parochial form of trust, but it’s trust nonetheless.  Whether the victimization is great (genocide) or small (political hostility), it serves to bond members of an ingroup together and bolster their trust in one another.

But the trust built isn’t just narrow – it seems to be blind.  In another experiment, they looked at how group victimhood shaped responses to trust breach.  After playing five successful rounds of the trust game, their partner keeps the whole pot and passes nothing back.  People whose attention had been drawn to group victimhood amended their trust in outgroup members after a breach, but kept on trusting ingroup members despite the breach.

So, shared victimhood forges trust, but that trust may be a little more resilient than it ought to be.   One can imagine that groups who have a shared group experience with victimhood, for instance, might be more vulnerable to affinity fraud, not only trusting co-ethnic fraudsters, but downplaying their early signals of untrustworthiness.

But on the other hand, sometimes it is helpful not to overreact to a transgression.  Some previous research (mine included) suggests that being forgiven can motivate those who break trust to change their ways.

So, here’s the big question for me:  Is the robustness of ingroup trust created by group victimization a problem?  

Are the participants in Rotella and colleagues’ studies noble forgivers, willing to offer their ingroup members a second chance?  Or are they gullible doormats, ignoring important signals of untrustworthiness and failing to learn from their errors?

I would love to see how group victimization shapes responses to one-off trust breaches (a single lapse of judgment) versus ongoing or repeated breaches (an obvious signal of untrustworthiness).