Leadership Jun 1, 2011
A Trusted Name
Why we trust people we do not know.
Trust is essential to successful business interactions, but it also involves risk. A supervisor who trusts a subordinate to complete a task could lose out on a raise or promotion if the subordinate botches an important assignment. Given the stakes, it makes sense that trust develops gradually, allowing people time to assess the trustworthiness of others. But some decisions to trust are made swiftly, as in the case of investors who trusted Bernard Madoff, head of the largest Ponzi scheme in history. What causes us to trust someone we do not really know?
To find out, J. Keith Murnighan, a professor of management and organizations at the Kellogg School of Management, and Li Huang, a doctoral student also at the Kellogg School, conducted a series of experiments using the Trust Game. They used subliminal cues, such as the name of a good friend, to prime feelings of trust. Their findings help explain the good vibes we sometimes immediately pick up from strangers, and also help explain why even sophisticated investors fall victim to financial scams, such as the one perpetrated by Madoff. “We found we could stimulate feelings of trust for a stranger without people even realizing,” Murnighan says, an outcome he finds “both exciting and scary.”
In the Trust Game, offerers decide how much money to send to anonymous receivers, knowing that receivers will get triple the amount sent and will then have the option of returning as much of the windfall to the sender as they wish. Sending a large amount of money indicates a high degree of trust because the receiver is not required to return anything.
Before volunteers participated in the Trust Game, Murnighan and Huang asked them to provide the names of people they trusted and people they did not trust. Then researchers quickly flashed these names to subliminally prime the study participants. After that, the subjects were asked if they wanted to send money to an anonymous stranger, with the understanding they might get some money back. Participants who had seen the names of people they trusted sent larger sums and were more likely to believe money would be returned to them. Because the priming was so brief—mere milliseconds—no one was able to recognize the names that had been flashed before the Trust Game.
The researchers varied the experiment, asking subjects to provide the names of objects they liked and objects they did not. Another iteration asked subjects to provide the names of people they liked and those they did not like. The researchers found that object names did not stimulate trusting feelings, but the names of liked people did. The two experiments indicate that feelings of trust are rooted in human relationships. “It’s more than a positive state of mind,” Murnighan says.
The study builds on previous research by Murnighan and others into the reasons why we sometimes trust strangers. Those studies have shown that trust is more likely if individuals expect to see one another in the future. The expectation of reciprocity also is a powerful motivator, Murnighan has found. Trust may also arise from positive organizational associations, such as schools or churches. This factor is at work in the marketing of affinity credit cards.
“We develop trust schemas—cognitive structures—that create expectations about how things are going to go,” Murnighan notes. Such cognitive structures may help explain why members of movie crews, who have little experience working together, trust each other to fulfill their roles. These internal trust schemes are built over time and help us decide “who we should trust and who we should not trust—whether this person is acting in a way that will hopefully benefit us rather than just benefiting themselves,” Murnighan remarks.
“Con men drop names to stimulate trust, and though we know to be cautious about that, we can still be affected.” — Murnighan
This latest set of studies suggests that the potentially risky decision to trust can begin below an individual’s conscious awareness—before there is time to evaluate or verify other information, like an individual’s reputation. This process can enhance the efficiency of social interactions, but it also increases our vulnerability to subliminal cues. “Imagine a fanatic fan of Elvis Presley,” Murnighan says. “If I know someone is a huge fan of Elvis, I might casually drop Elvis’s name to activate more trust in me. There is clearly a risk of manipulation.”
Madoff intentionally or inadvertently may have used this process, Huang says. For example, a prospective investor may have spotted friends’ names on Madoff’s client list, enhancing Madoff’s trustworthiness in the investor’s mind. Now, those who share the family name Madoff may suffer from this process—this might explain why Bernie Madoff’s daughter-in-law, Stephanie Madoff, sought a name change for herself and her children, Huang points out.
“Con men drop names to stimulate trust, and though we know to be cautious about that, we can still be affected,” Murnighan says. Used in the right setting, however, subliminal cues can be valuable management tools for building teamwork and cooperation. “Stimulating trust, if an organization has good intentions, can get over the kind of suspicion we have as a default,” he adds. Managers might stimulate trust by posting pictures of trusted role models and leaders.
Murnighan is planning a follow-up study to see if automatic cues can create a more trusting environment in sales negotiations, such as haggling over a used car. “If we actually trust, we can share our preferences—I may be more interested in price than a guarantee, you might be more interested in dependability than price—and reach a better agreement,” he says.
Related reading on Kellogg Insight
Name-Letter Branding: How your name can influence your choices
Measuring Trust: Introducing the Financial Trust Index
Trusting the Stock Market: Impressions influence investors decisions
Huang, Li and J. Keith Murnighan. 2010. “What’s In a Name? Subliminally Activating Trusting Behavior.” Organizational Behavior and Human Decision Processes. 111: 62-70.
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