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Capital FailureRebuilding Trust in Financial Services$
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Nicholas Morris and David Vines

Print publication date: 2014

Print ISBN-13: 9780198712220

Published to Oxford Scholarship Online: October 2014

DOI: 10.1093/acprof:oso/9780198712220.001.0001

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Trustworthiness and Motivations

Trustworthiness and Motivations

Chapter:
(p.129) 6 Trustworthiness and Motivations
Source:
Capital Failure
Author(s):

Natalie Gold

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780198712220.003.0006

Neoclassical economics assumes that agents are self-regarding, pursuing their private interests in ‘unsympathetic isolation’. The neoclassical analysis of trust explores how trustworthy behaviour can be sustained, based on self-regarding motivations. However, most philosophers agree that trustworthy behaviour must not spring from wholly self-regarding motivations. The chapter distinguishes weak trustworthiness, as studied in neoclassical economics, from strong trustworthiness, which must include a non-self-regarding motivation. Strong trust is ubiquitous, efficient, and often a precondition for effective sanctions. Strong trust is important in finance because of product complexity: customers rely on truthful assessments by designers. To understand the causes of untrustworthy behaviour the chapter examines peoples’ motivations and the ‘framing’ of situations. Regulations need to be enforced by sanctions, to incentivise wholly self-regarding agents to be at least weakly trustworthy. But more than this, a change of culture can improve trustworthiness, ensuring that agents see strong trustworthiness as expected and appropriate.

Keywords:   self-regard, motivation, strong trust, weak trust, framing, trustworthiness, financial services

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