An experiment on the effects of embeddedness in trust situations - Buying a used car

This article describes a vignette experiment on the effects of temporal emb eddedness and network embeddedness in trust situations. The experiment uses a setting in which a buyer wants to buy a used car from a car dealer. We d istinguish between effects on trust of the past relation and the effects of the expected future relation between the buyer and the dealer A buyer can learn about the trustworthiness of the dealer from past transactions of the dealer. Moreover, the buyer can control the dealer if the buyer and the de aler expect more transactions in the future, because the buyer may sanction the dealer if the dealer would act untrustworthy in the present transactio n, for example, by refraining from future transactions. Temporal embeddedne ss facilitates learning and control through the bilateral relation of the b uyer and the dealer, while network embeddedness facilitates learning and co ntrol through third parties. In the experiment, subjects are asked to compa re different settings for buying a used car, while the relation between the buyer and dealer is varied in these settings. We conclude that both learni ng and control affect trust at the level of the dyad (temporal embeddedness ) as well as at the group-level (network embeddedness).