Trust and Transitions in Modes of Exchange

Abstract

In this study, we investigate the relationship between uncertainty and trust in exogenous shifts in modes of social exchange (i.e., those that are not initiated by the individuals in a given exchange system). We explore how transitions from a high uncertainty environment (reciprocal exchange) to lower-uncertainty environments (nonbinding or binding negotiated exchange) affect the level of trust among exchange partners. Our results show that if cooperation rates are high before and after a change in mode of exchange, trust declines when the uncertainty created by the mode of exchange decreases. Furthermore, we find that trust depends on both the amount of uncertainty inherent in the form of the exchange and the level of cooperation before and after the transition.