New publication: How Monitoring Influences Trust

24.11.2016

The authors discuss the managerial implications of the results for designing and implementing monitoring systems.

Maurice E. Schweitzer, Teck-Hua Ho, Xing Zhang (2016) How Monitoring Influences Trust: A Tale of Two Faces. Management Science

FRS Principal Investigator Prof Ho Teck Hua and postdoctoral researcher Zhang Xing from the ‘Human Decision Making in Risky, Dynamic and Complex Environments’ module recently published the paper 'How Monitoring Influences Trust: A Tale of Two Faces' in Management Science, a leading journal in the field of operation research and management.

Trust is believed to be an essential ingredient for effective organizations, delivering its greatest social value as a linchpin to cooperative behaviour. Promoting trust and trustworthy behaviour represents a constant managerial challenge. In this paper, the authors investigate how monitoring changes the behaviour of both those who are monitored and those who monitor others.

Across three experiments, participants were paired in repeated trust games with different monitoring conditions. In each iteration of the repeated trust game, a trustor must decide how much money to pass to a trustee. The money passed is either tripled or quadrupled; and the trustee must then decide how much money to return to the trustor.

The studies show that monitoring significantly influenced trustee behaviour. When trustees could anticipate monitoring, they engaged in opportunistic behaviour – they complied when they anticipated that they would be monitored; they defected when they anticipated that they would not be monitored.

Trustors, on the other hand, failed to appreciate how strategically their counterparts would act. They misattributed the strategic, compliant behaviour they observed as signals of trustees’ trustworthiness and systematically over-relied on the compliant behaviour they observed during anticipated monitoring. As a result, trustors misplaced their trust when they were unable to monitor their counterparts.

The authors discuss managerial implications of these results for designing and using monitoring systems. Though technology has expanded the tools managers can use to monitor employees, we know surprisingly little about how monitoring changes the behaviour of both those who are monitored and those who do the monitoring. Managers routinely face the challenge of trusting others, and the findings suggest that they may be particularly susceptible to misplacing their trust.

Management Science is published by the Institute for Operations Research and the Management Sciences (INFORMS) - the largest professional society in the world for professionals in the fields of operations research, management science, and analytics.


Authors

Maurice E. Schweitzer
The Wharton School, University of Pennsylvania, Philadelphia
Teck-Hua Ho
NUS Business School, National University of Singapore, and Haas School of Business, University of California, Berkeley, Berkeley
Xing Zhang
Singapore–ETH Center, Swiss Federal Institute of Technology in Zurich

 
 
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