Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237135 
Year of Publication: 
2018
Citation: 
[Journal:] Financial Innovation [ISSN:] 2199-4730 [Volume:] 4 [Issue:] 1 [Publisher:] Springer [Place:] Heidelberg [Year:] 2018 [Pages:] 1-18
Publisher: 
Springer, Heidelberg
Abstract: 
Trust is a key dimension in the principal-agent relationship and it has been studied extensively. However, the dynamics, evolution, and intrinsic motivation and mechanisms have received less attention. This paper investigates the intrinsic motivation of trust and it proposes a theoretical model of trust evolution that is based on the notion of 'trust response' and 'trust spiral'. We then specifically focus on trust within the lending relationship between banks and small businesses, and we run numerical simulations to further illustrate the evolution of involved mutual trust over time. Our model provides implications for future research in both trust evolution and small business lending relationships.
Subjects: 
Trust
Spiral
Small business lending
Reciprocity
Altruism
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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