SGS Brownbag - Giuseppe Soda, Bocconi University

The predominant focus of the organizational literature on trust has been on direct interactions between actors. While 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 to accumulate trust. Moreover, we also theorize that the combination of signals from network structure and behavior amplify trust accumulation in network actors. We test our predictions using data from an online social trading platform with over 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 their communication 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 formation 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.