trust notesveryard projects > trust > trust notes
|industry analysis and comment
|Trust is commonly regarded as a positive good - the lubricant
of business relationships. Like oil, it is slippery and difficult to grasp.
We define trust as a property of a system or relationship
based on expectations of reasonable and fair behaviour.
Veryard Projects is working with others building some innovative mechanisms for building and verifying trust.
We are also collecting patterns for trust and security (among other things), across component-based business and web services. Our pattern catalogue is hosted by the CBDi Forum. Comments and contributions are most welcome.
Principles of Trustveryard projects > trust > trust notes > principles
|In a complex system of relationships, we try to distinguish between
We can then try to assess the risks of dealing with the ones we don't trust, and secure ourselves against rogue behaviour.
|Trust and mistrust propagate themselves around a system.
Who killed Harry Potter's parents? Transitive networks of trust and betrayal
|Trust is an emergent property of a system of relationships.
|When we are dealing in familiar domains, we often take trust for granted - until something appears to shake our trust. In new domains, however, we may be much less certain whom or what we can trust. This difficulty is currently evident in e-commerce.
|There are some big problems with conventional thinking about trust. Simple patterns of trust are sometimes misleading. The signs of trust can usually be faked. Security mechanisms can always be broken if the stakes are high enough.
|Trust and security can never be purely technical matters. They depend crucially on process and people.
Can internet banking be trusted?veryard projects > trust > trust notes > internet banking
In new domains, however, we may be much less certain whom or what we
can trust. This difficulty is currently evident in e-commerce.
In this light, let's review two recent reports on internet banking.
|Many online banks provide far less consumer protection than traditional offline banks. In some cases, there is no ceiling on the liability of the customer in the event of fraud, in contrast to the situation with traditional credit or cash cards.
|In a recent British survey, only 7% of adults trusted online banks,
compared with 75% who trusted traditional banks.
source: Henrion, Ludlow & Schmidt
If some of the banks don't trust the technology to prevent fraud, and
want to place all the risk onto the customer, why should the customers
trust either the technology or these banks? Unfortunately, this attitude
by some banks is likely to have an effect on the level of trust in the
internet banking market overall.
Trust and Mistrustveryard projects > trust > trust notes > and mistrust
|The ability to make credible commitments.
Can this person or company fulfil its promises and expectations?
|An expectation that commitments will be honoured, even in the absence
of an external enforcement mechanism. (Although it may be theoretically
possible to take legal action against the other party, this often involves
too much cost and delay to be a practical option.)
Is this person or company willing to fulfil its promises and expectations? Cheerfully or grudgingly?
|An expectation of honourable behaviour in unforeseen circumstances.
(In other words, you behave as you would have agreed to behave, if these
circumstances had been foreseen.)
Will this person or company suddenly start behaving badly/unpredictably when anything unusual crops up?
|Not taking advantage of the bad luck of the other party.
Is this person or company an opportunist?
|Protecting the other party (as far as possible) from one's own turbulence
Is this person or company going to drag me into all his/her/its internal problems? Are they going to let me down, always blaming someone else?
|"He made me do it."
|blaming third party
|"It was an accident."
|denying responsibility for own carelessness or recklessness
|"He hit me first."
|"I didn't know I wasn't supposed to do that."
"It didn't say anything about that in the contract (or specification)."
|taking advantage of the absence of explicit constraints
Mistrust is usually more difficult to deal with than simple absence
of trust. How do I deal with other people's mistrust of me, whether
this is fairly deserved or not? Do I tackle false beliefs head-on,
or do I try to dissociate myself from the events that triggered the mistrust,
or do I simply switch my identity and reappear under a new guise?
|Restoring Trust - Overcoming Mistrust
Trust and Riskveryard projects > trust > trust notes > and risk
There is a particular concern about the use of shared or borrowed assets. What risks may we take with other people's assets? This is a difficult area, where there are no clear rules of conduct. Some people think they are morally bound to take greater care of other people's assets than of their own, while other people are equally careful or careless.
If someone appears to be reckless with his own assets, does that entitle us to take similar risks with his assets?
Collaborative gambling raises further difficult issues about trust and shared risk. Many forms of proxy gambling are illegal, because of the huge opportunity for abuses of trust. (Suppose I place a bet on your behalf and then "lose" the ticket. Suppose I buy two lottery tickets, and only decide after the draw which one was yours.) But there are many commercial situations that have a similar structure of shared risk.
Talking of a change of scale in the social order, Geoff Mulgan writes: 'One of the best signs of this return to smallness in many Western societies has been the decline in trust in big institutions, such as manufacturers, governments and trade unions, and the corresponding rise in trust in personal relationships.' [Connexity, p117]
Requirements for maintaining and growing trustveryard projects > trust > trust notes > requirements
Trust and Commitmentveryard projects > trust > trust notes > and commitment
Commitment includes both obligations (my obligations to you, your obligations to me) and exit costs (costs to you or me of terminating or cutting back the relationship).
Obligations may include: actual obligations, contingent obligations (agreed contingencies in foreseen circumstances) and hypothetical obligations (what would have been agreed if unforeseen circumstances had been foreseen).
People and companies often fail to recognize the true depth of the commitment they have made to another party - especially the exit costs. Alternatively, they over-estimate the exit costs, and this tempts them to stay in an unhealthy relationship.
Some people and companies deliberately misrepresent the depth of their commitment to others, either to avoid being taken advantage of (especially in a situation where commitment appears to be unequal) or to gain some advantage themselves. Such tactics themselves indicate a shortage of trust or trustworthiness.
IBM has recently stated that its business is technology and solutions, and that it has no intention of becoming an ISP, a bank, or a retail operation. Martin Butler, the industry analyst, sees this as an important strategic commitment on IBM's part. According to him, "it means that large companies can enter into an uninhibited relationship with IBM, without fear that a partner might one day turn into a competitor". Butler contrasts this with the predatory behaviour of some other leading IT companies.
|market topology - barriers to entry and exit
Trust and Knowledgeveryard projects > trust > trust notes >and knowledge
Knowledge about the other party includes the following:
|who are they really?
|how committed are they to this relationship?
|perceptions, beliefs and values
|how do they see the world?
|what good deeds or bad deeds are they capable of?
(based on past history or present capacity)
|whom else are they in bed with?
(and how committed are they to these other partners?)
Trust and Valuesveryard projects > trust > trust notes >and values
Where value systems are similar, small differences in values may be either overlooked altogether, or exaggerated in importance. These differences should be respected, but kept in proportion.
Some people adopt the attitude: "These are the values you must have if you want to do business with me." This may create an incentive for other people to falsify their declared values, which reduces the total trust in the system as a whole.
This is particularly difficult to negotiate with relatively intangible assets, such as customer relationships or intellectual property.
Consultancy networks always struggle with questions of trust. How can I trust you to behave in front of my clients? And how should I behave in front of your clients, to repay your trust?