European Business Schools Librarian's Group

IESE Research Papers,
IESE Business School

No D/567: Bounded rationality, value systems and time-inconsistency of preferences as rational foundations for the concept of trust

Jose M. Rosanas ()
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Jose M. Rosanas: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN

Abstract: This paper intends to contribute to the (bounded rationality) foundations of trust. After reviewing the extant definitions, I establish the formal structure of situations involving trust. In that context, I examine the paradoxical situation of (calculative) trust in simple settings. Then I show how bounded rationality provides a rationale for a concept of trust that goes beyond that calculative notion. Value systems and possible inconsistency of time preferences are shown to be crucial elements.

Keywords: Trust; Bounded rationality; Value systems; Behavioral decision-making

32 pages, September 15, 2004

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