More from these Authors

• Article | Journal of Applied Psychology | November 2018

  Worthy of Swift Trust? How Brief Interpersonal Contact Affects Trust Accuracy

  Oliver Schilke and Laura Huang

  Organizational scholars have long underscored the positive consequences of trust, yet trust can also have dysfunctional effects if it is not placed wisely. Though much research has examined conditions that increase individuals’ tendencies to trust others, we know very little about the circumstances under which individuals are likely to make more accurate trust decisions (i.e., neither misplace their trust nor refrain from trusting when doing so would have been beneficial), especially when they must do so rapidly and in the absence of an exchange history. Put simply, we have little understanding of what drives the accuracy of swift trust judgments. Building on relevant literatures, we propose that short episodes of prior interpersonal contact with a partner can increase the accuracy of swift trust decisions. Across two experimental studies, we demonstrate that brief interpersonal contact leads trustors to both (a) become more accurate in their trust decisions and (b) engage in other-focused perspective taking, which mediates the effect of interpersonal contact on trust accuracy. We then show that it is specifically because of verbal cues, rather than visual cues, that brief interpersonal contact enables other-focused perspective taking and, in turn, trust accuracy (Study 3). We contribute to the literature on trust by examining trust accuracy (rather than mere trust levels), identifying the significant role of brief interpersonal contact, and revealing other-focused perspective taking as a key mechanism in accurate swift trust decisions.

  Keywords: Trust; Interpersonal Communication; Judgments; Perspective;

  Citation:

  Schilke, Oliver, and Laura Huang. "Worthy of Swift Trust? How Brief Interpersonal Contact Affects Trust Accuracy." Journal of Applied Psychology 103, no. 11 (November 2018): 1181–1197.  View Details

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• Case | HBS Case Collection | October 2018

  Arlan Hamilton and Backstage Capital

  Laura Huang and Sarah Mehta

  Frustrated by an inability to convince existing venture capital firms to invest in companies led by women, people of color, and LGBT founders, Arlan Hamilton started her own firm, Backstage Capital, in 2015. Hamilton understood the untapped potential of companies run by underrepresented founders, a group historically excluded from venture capital funding, and was eager to demonstrate the significant returns on investment in such companies. This case explores Hamilton’s nontraditional VC background, and her mission to fund startups where at least one founder of the company identifies as a woman, person of color, or LGBT. Now, three years after its founding, Hamilton is considering launching both an accelerator and a fund that will invest exclusively in Black women.

  Keywords: black leadership; LGBTQ; women; people of color; Entrepreneurship; Mission and Purpose; Venture Capital; Corporate Social Responsibility and Impact; Identity; Personal Characteristics; Prejudice and Bias; Social Issues; Diversity; Gender; Race;

  Citation:

  Huang, Laura, and Sarah Mehta. "Arlan Hamilton and Backstage Capital." Harvard Business School Case 419-029, October 2018.  View Details

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• Chapter | Handbook of Behavioral Economics | 2018

  Behavioral Household Finance

  John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian

  This chapter provides an overview of household finance. The first part summarizes key facts regarding household financial behavior, emphasizing empirical regularities that are inconsistent with the standard classical economic model and discussing extensions of the classical model and explanations grounded in behavioral economics that can account for the observed patterns. This part covers five topics: consumption and savings, borrowing, payments, asset allocation, and insurance. The second part addresses interventions that firms, governments, and other parties deploy to shape household financial outcomes: education and information, peer effects and social influence, product design, advice and disclosure, choice architecture, and interventions that directly target prices or quantities.

  Keywords: Personal Finance; Global Range; Household; Behavior; Strategy; Governing Rules, Regulations, and Reforms; Product Design; Welfare or Wellbeing;

  Citation:

  Beshears, John, James J. Choi, David Laibson, and Brigitte C. Madrian. "Behavioral Household Finance." In Handbook of Behavioral Economics: Foundations and Applications 1, edited by B. Douglas Bernheim, Stefano DellaVigna, and David Laibson, 177–276. Amsterdam: Elsevier, 2018.  View Details

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