Prismatic Trust: How Structural and Behavioral Signals in Networks Explain Trust Accumulation

Abstract

The predominant focus of the organizational literature on trust has been on direct interactions between actors. Whereas this emphasis has solidified our understanding of the dyadic foundations of trust, we know relatively little about the mechanisms of trust creation in network contexts. In this paper, we introduce the network mechanism of prismatic trust to explain why some actors are more trusted than others. Specifically, we posit that networks act as prisms that generate signals of trustworthiness based on not only actors’ positions in the social structure, but also their networking behavior. Moreover, we also theorize that the combination of signals from network structure and behavior amplifies trust accumulation in network actors. We test our predictions using data from an online social trading platform with more than 28,000 traders across 38 weeks. We find that traders who occupy positions of higher status in the network and those who express positive sentiments in the content of their communications (networking behaviors), accumulate more trustors. Furthermore, the positive effects of network status and the expression of positive sentiments on trust accumulation are mutually reinforcing. In sum, we contribute to the organizational literature on trust by proposing the role of a prismatic view in explaining how trust accumulates in network actors as a function of their position in social structure, their networking behavior, and a combination of the two. This paper was accepted by Isabel Fernandez-Mateo, organizations. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2021.02810 .