Trust and Community on the Internet. Opportunities and Restrictions for Online Cooperation
2004 (26) Issue 1
Guest-Editors: Bernd Lahno / Uwe Matzat
Early studies in the area of Internet Research emphasized the deficiencies that computer-mediated communication as opposed to face-to-face communication would have. The chances for the evolution of cooperative relationships on the Internet were assessed sceptically. Present research findings correct this point of view. In spite of a missing central authority, without formal controls and sanctions, with anonymity and easy-to-use exit options there is not only chaos and anomy on the Internet. Rather, there is a surprisingly large amount of cooperation and social order. There is a successful exchange of individual goods, public goods are produced, and there are stable social networks, reliable communities and effective social norms. If people interact online under certain conditions, there seem to be incentives that stimulate cooperation and social exchange. Additionally, under favourable conditions the Internet can be used for the establishing of cooperative relationships that would hardly be possible in the case of pure face-to-face communication. Such positive effects, however, are not a technical automatism. The failure of many online communities, as well as the discussion about the social consequences of the Internet for the social integration of its users is a warning against nave optimism.
In this volume the potential, the pre-conditions and the limits of the Internet for the emergence of trust and community building are discussed. Trust and community are social phenomena which are of utmost importance for social relationships and social order. The analysis of the Internet as a trust-building medium focuses on the conditions under which the Internet promotes social exchange and cooperation between individuals and between groups. The analysis of the Internet as an opportunity for community building focuses on the conditions under which it can be used for comprehensive forms of collective action and group living. Both questions are interrelated. Trust is a pre-condition for community building. At the same time, social bonds within a community facilitate the placement of trust under risky conditions.
Trust is a fundamental element of cooperative relations. It can be understood as the willingness to make one's own well-being to some degree dependent on other people or institutions. The advantages of mutual cooperation can often only be gained when individuals are willing to take risks and to expose themselves to the danger of being disadvantaged if others do not cooperate. This means: in such situations cooperation is possible only if trust is placed. In spite of the risks, individuals cooperate with each other on the Internet to a significant degree, as the examples on online markets and auctions show. These examples suggest that there is trust to a significant degree. Since trust-building mechanisms are an important foundation for different forms of cooperation, knowledge about the opportunities and limitations for building trust on the Internet is crucial for assessing the possibilities for online cooperation and collaboration in general.
One important question to be analyzed is in which parts of the Internet does cooperation take place and through which mechanisms is trust established and secured. It should be examined whether and to what extent the Internet as a technical medium contributes to an extension of trusting relationships and interaction. Which technical, organizational, social, and legal conditions further the extension of trusting interaction and in which way do these conditions depend on and contribute to a satisfying short-or long-term interaction between the participants? Conditions that are conducive to the placement of trust can be direct or indirect exchange relations between participants:
trustworthiness or reputation of the actors;
one-sided prior contributions that initiate cooperation: gift-relations;
communality through common goals or values;
affective bonds between individuals.
The general limits to the emergence of trust-building conditions will be the limits to the placement of trust. In as far as such conditions prevail for online interaction, the Internet is a trust-building medium. If such conditions can be realized on the Internet for individuals or groups that could not build up trusting relations outside of the Internet-for example because of transaction costs being too high-, then the Internet is a trust-extending medium.
Communities are characterized by a special feeling of solidarity between their members. They consist of groups of people who traditionally interact in locally restricted environments and who develop durable social relationships. Communities provide opportunities for individual and collective action with far-reaching consequences for society. But usually membership in a community does not only have an instrumental value for the pursuit of the common goals of its members. Additionally, membership has a highly affective value. Communities satisfy fundamental human needs, such as group attachment, identification, security, solidarity, and mutual understanding. They give individuals the feeling of being esteemed, and they are an important source of trust and thus provide for the stabilization of cooperation since they transmit common values and promote affective bonds. Communities have a pivotal function in integrating society and also produce social capital. The increasing mobility of modern societies contributes to the diminishing of traditional communities that are based on personal exchanges and the geographical closeness of their members. At the same time, mobility contributes to the popularity of communication media such as telephone and electronic mail that allow for interpersonal communication over long distances.
It is an important question whether and to what extent communities exist on the Internet and what their emergence and continuation depend on. In this context, it is of special interest to analyze whether the Internet provides opportunities for the development of new communities that are as valuable for individuals as the traditional communities whose existence is endangered. An additional issue to be discussed is about the quality of online relationships and online groups. Under which conditions can relationships that were developed on the Internet acquire a satisfying quality for individuals and groups? The task of Internet research is to examine in how far conditions can be realized in online groups that are known to be community-advancing in general. Such conditions are
common goals and values;
special relational interests of the group members;
a high degree of interdependence among the members;
multiplexity of the relationships;
durability of the relationships;
easy accessibility of the members to each other.
Traditional communities ensure the existence of (some of) these conditions usually by their local embeddedness. Since such a local anchoring of communities is not the rule for online groups, the question emerges as to the other mechanisms which help the Internet to promote the existence of favourable conditions for community development.
Social, economical, psychological, legal and technical conditions have to be taken into account to examine the potential as well as the limitations of the Internet for the development of trust and communities. The evolution of the Internet is influenced by a variety of factors which suggests that a discussion cutting across the usual disciplinary borders is necessary and useful. This conviction was the background for an international and interdisciplinary conference on Trust and Community on the Internet. Opportunities and Restrictions for Online Cooperation. The conference took place from 31 July to 2 August 2003 at the Centre for Interdisciplinary Research (ZiF) at the University of Bielefeld and was organized by Michael Baurmann, Bernd Lahno and Uwe Matzat. The meeting was financed by the ZiF and the Deutsche Forschungsgemeinschaft (DFG). The organizers greatly appreciate this support and express their thanks to both institutions. The articles in this volume are all based on papers which were presented at the conference.
The first group of articles consider Concepts and Backgrounds. They discuss general theoretical models and empirical analyses of conditions for the development of trust and communities and examine whether such conditions can be found in certain parts of the Internet or to what extent they can be created. Henk de Vos explicates the fundamental sociological concept of community. He points out that communal living has deep connections with human social nature and is strongly associated with well-being and health. Structural conditions for the emergence and maintenance of communities are specified and it is discussed in which way the Internet affects these conditions. Bernd Lahno differentiates between a behavioral, a cognitive, and an affective dimension of trust. He argues that affective aspects of trust must be included in any adequate account of the role of trust in social dilemma situations involving multiple equilibria. The design of institutions that can foster trustful cooperation in the context of the Internet is analyzed under this perspective. The article by Hans-Werner Bierhoff and Bernd Vornefeld deals with the social psychology of trust. Three levels of trust are delineated: trust in a specific person, trust in people in general and trust in abstract systems. The authors assume that, in the case of the Internet, trust in the Internet as a system is of crucial importance. Several possibilities for strengthening the trustworthiness of the Internet as a system are presented. Uwe Matzat gives an overview of the present state of theoretical-empirical Internet research. He emphasizes the fact that recent insights suggest that the Internet should no longer be regarded as a constant that has uniform effects but that the social consequences of Internet use depend on a number of contextual conditions. Some hypotheses as to which conditions and features of online groups could facilitate bilateral or group-level cooperation are discussed.
The second section of articles focuses on The Internet as an Environment for Trust. Victoria McGeer argues that the Internet provides conditions in which rational individuals can in principle initiate and maintain relationships of interpersonal trust. But she underlines the importance of developing mature capacities for trust in an Internet context since immature trusters are particularly vulnerable to the liablities of Internet trust. Philip Pettit expresses his fundamental scepticism of the idea that trust between people can be formed on the basis of Internet contact alone. According to his view, a necessary precondition for the development of trust in a rich sense of the term is not given when people are related only via the Internet and their personal identity remains invisible to others. Russell Hardin analyzes the Internet as a form of social capital that is not reducible in its characteristics to other forms of social capital: it enables us to do many things with radically greater efficiency than is possible without it. But Hardin suggests that relationships on the Internet are too thin to back trust and cooperation among those who do not have relationships off-line with each other. In their joint contribution, Geoffrey Brennan and Philip Pettit deal with the role of esteem in Internet relations. They argue that the desire for esteem not only serves an important function in ordinary social life but that Internet relations are also susceptible to esteem-related incentives. For them there is every reason to believe that a good e-reputation is an object of desire for real agents and therefore an important driving force in disciplining interactions on the Internet and supporting the operation of social norms.
The next group of articles under the heading Reputation and Online Auctions analyze empirically the mechanisms that further the building of trust on the Internet especially in the field of economic transactions. Chris Snijders and Richard Zijedeman investigate the phenomenon that transactions in online auctions such as eBay and Ricardo seem to work relatively smoothly. In an attempt to replicate the results of recent research on online auctions, they study the conditions under which eBay's reputation mechanisms can prevent opportunistic behaviour. Gary E. Bolton, Elena Katok and Axel Ockenfels report on experiments suggesting that it is the interaction of social preferences and cleverly designed reputation mechanisms that solve the trust problem on Internet market platforms to a large extent. The experiments show that the seller's intrinsic motivation to be trustworthy is not suffcient to sustain trade when not complemented by a feedback system. Werner Grüth and Hartmut Kliemt compare traits of an organizational design to promote trustworthiness as suggested by economic reasoning with those that have actually emerged on the Internet. They ask whether institutions like eBay will increasingly have to 'economize on virtue' although they have so far been able to rely on its spontaneous provision.
The subject of the next four articles is Groups and Networks. Coye Cheshire and Karen S. Cook comment on the application of experimental sociological research to different types of computer-mediated social interactions, with particular attention to the emergence of 'trust networks'. They develop a classification system that helps to integrate the existing research on trust in experimental social psychology with the field of computer-mediated exchange. Anabel Quan-Haase and Barry Wellman state that the role of groups in networked organizations has remained unclear and that little is known about how computer-mediated communication is used to bridge group and organizational boundaries. They examine how employees of a high-tech company communicate with members of the work group, other colleagues in the organization, and colleagues outside the organization to understand their boundary-spanning communications better. The paper by Andreas Flache addresses the question of how virtual communication may affect cooperation in work teams theoretically. A formal social exchange model is used and the degree of team virtualization, i.e. the extent to which interaction between team members occurs online, is related to parameters of the exchange. Simulation results suggest both positive and negative effects of team virtualization on work-cooperation. Margit Osterloh and Sandra Roth investigate under which conditions open source models-such as the open source software production- may be successful in general. They show that a complex interplay of situational, motivational, and institutional factors have to be taken into account. It is argued that the success of the open source model is greatly facilitated by well-balanced intrinsic and extrinsic motivation and low costs for contributions and governance mechanisms.
The last article in this volume by Eric Hilgendorf deals with Law and the Internet. The main forms of datanet crime on the Internet are described and some of the most important Internet-cases of the last decade are discussed. As one of the main problems of datanet crime is its global scope, a transnational criminal law for the Internet seems to be desirable and possible. But Hilgendorf points out that the problems of computer-related crime on the Internet cannot be solved by criminal law alone.
The volume is completed by the Internet-hymn. The lyrics of the hymn were written by Geoffrey Brennan to the tune of the famous song Edelweiss by Richard Rodgers and Oscar Hammerstein II from the musical The Sound of Music. The Internet-hymn was performed for the first (and, so far, last) time at the Centre of Interdisciplinary Research at the final session of the conference. Geoffrey Brennan as the solo-singer was strongly supported by the chorus of the conference participants.
Finally we wish to express our personal thanks to the staff of the ZiF for their exceptionally friendly and professional support, especially to Marina Hoffmann, Daniela Mietz and Trixi Valentin who were in charge of the organization of the conference and the well being of the participants. Not least because of their invaluable assistance the conference was a pleasure for all.
Michael Baurmann, Bernd Lahno, Uwe Matzat
Table of Contents
Title: Community and Human Social Nature in Contemporary Society
Author: Henk de Vos
Abstract: Although community is a core sociological concept, its meaning is often left vague. In this article it is pointed out that it is a social form that has deep connections with human social nature. Human social life and human social history can be seen as unflagging struggles between two contradictory behavioral modes: reciprocity and status competition. Relative to hunter-gatherer societies, present society is a social environment that strongly seduces to engage in status competition. But at the same time evidence increases that communal living is strongly associated with well being and health. A large part of human behavior and of societal processes are individual and collective expressions of on the one hand succumbing to the seductions of status competition and one the other hand attempts to build and maintain community. In this article some contemporary examples of community maintaining, enrichment and building are discussed. The article concludes with a specification of structural conditions for community living and a short overview of ways in which the Internet affects these conditions.
Title: Three Aspects of Interpersonal Trust
Author: Bernd Lahno
Abstract: Trust is generally held to have three different dimensions or aspects: a behavioral aspect, a cognitive aspect, and an affective aspect. While there is hardly any disagreement about trusting behavior, there is some disagreement as to which of the two other aspects is more fundamental. After presenting some of the main ideas concerning the concept of trust as used in the analysis of social cooperation. I will argue that affective aspects of trust must be included in any adequate account of the role of trust in social dilemma situations involving multiple equilibria. Cooperation in such situations requires coordination even though information on what another player might do is not available. A trusting person can handle such problems of cooperation by framing the situation in a way that goes beyond cognitive trust and solves what I shall call the problem of normative consent. I will conclude with some remarks about the design of institutions that foster trustful cooperation, especially in the context of the Internet.
Title: The Social Psychology of Trust with Applications in the Internet
Author: Hans-Werner Bierhoff / Bernd Vornefeld
Abstract: Three levels of trust as a social psychological construct are delineated: trust in a specific person (relational trust), trust in people in general (generalised trust) and trust in abstract systems. Whereas much research is available on relational trust and generalized trust, much less is known about trust in systems. From theory and research several assumptions are derived which are related to the development of trust in the Internet. For example, the reliability of information technology is assumed to be directly related to the development of trust in the Internet. In addition, it is assumed that in situations in which it is hard to verify the justification for trust, people construct subjective beliefs which represent a transformation of relational trust into system trust. Applications of these assumptions for strengthening the trustworthiness of the Internet are discussed.
Title: Cooperation and Community on the Internet: Past Issues and Present Perspectives for Theoretical-Empirical Internet Research
Author: Uwe Matzat
Abstract: This paper first summarizes two central debates in the field of social scientific Internet research, namely the debate about the so-called 'social impact of Internet use' and the debate about the existence of community on the Internet. Early research discussed whether building up a community on the Internet was possible and what the effects of the use of the Internet were for its user. Recent research on the social consequences of Internet use suggests that 'the' Internet should no longer be regarded as a constant that has uniform effects for its users. Rather, the consequences of its use depend on a number of contextual conditions. The paper presents some theories that explain which conditions and features of online groups facilitate the finding of solutions to bilateral or group-level problems of cooperation.
Title: Developing Trust on the Internet
Author: Victoria McGeer
Abstract: Does the Internet provide an environment in which rational individuals can initiate and maintain relationships of interpersonal trust? This paper argues that it does. It begins by examining distinctive challenges facing would-be trusters on the net, concluding that, however distinctive, such challenges are not unique to the Internet, so cannot be cited as grounds for disparaging the rationality of Internet trust. Nevertheless, these challenges point up the importance of developing mature capacities for trust, since immature trusters are particularly vulnerable to the liabilities of Internet trust. This suggests that Internet trust can only be rational for those who have developed mature capacities for trust. But that suggestion ignores how trust on the Internet may also facilitate the development of such capacities.
Title: Trust, Reliance and the Internet
Author: Philip Pettit
Abstract: rusting someone in an intuitive, rich sense of the term involves not just relying on that person, but manifesting reliance on them in the expectation that this manifestation of reliance will increase their reason and motive to prove reliable. Can trust between people be formed on the basis of Internet contact alone? Forming the required expectation in regard to another person, and so trusting them on some matter, may be due to believing that they are trustworthy; to believing that they seek esteem and will be rationally responsive to the good opinion communicated or promised by an act of trust; or to both factors at once. Neither mechanism can rationally command confidence, however, in the case where people are related only via the Internet. On the Internet everyone wears the ring of Gyges; everyone is invisible, in their personal identity, to others.
Title: Internet Capital
Author: Russell Hardin
Abstract: The Internet is a huge form of social capital that is not reducible in its characteristics to other forms of social capital, such as ordinary networks of people who more or less know each other. It enables us to do many things with radically greater efficiency than we could without it. It can do some things better but other things much less well than traditional devices can. At both extremes, the differences are so great as to be not merely quantitative but also qualitative. The things it can do better include things that can readily be checked and verified. The things that it often cannot do include securing commitments for action. A brief history of the forms of social cooperation suggests that relationships on the Internet are typically too thin to back trust and cooperation among those who do not have fairly rich relationships off-line.
Title: Esteem, Identifiability and the Internet
Author: Geoffrey Brennan / Philip Pettit
Abstract: The desire for esteem, and the associated desire for good reputation, serve an important role in ordinary social life in disciplining interactions and supporting the operation of social norms. The fact that many Internet relations are conducted under separate dedicated e-identities may encourage the view that Internet relations are not susceptible to these esteem-related incentives. We argue that this view is mistaken. Certainly, pseudonyms allow individuals to moderate the effects of disesteem---either by changing the pseudonym to avoid the negative reputation, or by partitioning various audiences according to different audience values. However, there is every reason to believe that a good e-reputation is an object of desire for real agents. Further, although integrating one's reputation under a single identity has some esteem-enhancing features, those features are not necessarily decisive. We explore in the paper what some of the countervailing considerations might be, by appeal to various analogies with the Internet case.
Title: Reputation and Internet Auctions: eBay and Beyond
Author: Chris Snijders / Richard Zijdeman
Abstract: Each day, a countless number of items is sold through online auction sites such as eBay and Ricardo. Though abuse is being reported more and more, transactions seem to be relatively hassle free. A possible explanation for this phenomenon is that the sites' reputation mechanisms prevent opportunistic behavior. To analyze this issue, we first summarize and extend the mechanisms that affect the probability of sale of an item and its price. We then try to replicate the results as found in four recent papers on online auctions. Our analyses reveal that (1) it makes sense to differentiate between 'power sellers' and the less regular users, (2) there are variables that have an effect on sales that are often not controlled for, (3) one should carefully consider how reputation is operationalized, (4) neglecting heteroscedasticity in the data can have serious consequences, and (5) there is some support indicating that effects differ across auction sites.
Title: Trust among Internet Traders: A Behavioral Economics Approach
Author: Gary E. Bolton / Elena Katok / Axel Ockenfels
Abstract: Standard economic theory does not capture trust among anonymous Internet traders. But when traders are allowed to have social preferences, uncertainty about a seller's morals opens the door for trust, reward, exploitation and reputation building. We report experiments suggesting that sellers' intrinsic motivations to be trustworthy are not sufficient to sustain trade when not complemented by a feedback system. We demonstrate that it is the interaction of social preferences and cleverly designed reputation mechanisms that solves to a large extent the trust problem on Internet market platforms. However, economic theory and social preference models tend to underestimate the difficulties of promoting trust in anonymous online trading communities.
Title: The Evolution of Trust(worthiness)in the Net
Author: Werner Güth / Hartmut Kliemt
Abstract: The main results of our indirect evolutionary approach to trust in large interactions suggest that trustworthiness must be detectable if good conduct in trust-relationships is to survive. According to theoretical reasoning there is a niche then for an organization offering a (possibly) costly service of keeping track of the conduct of participants on the net. We compare traits of an organizational design as suggested by economic reasoning with those that actually emerged and ask whether institutions like eBay will increasingly have to ’economize on virtue' although so far they could rely on its spontaneous provision.
Title: The Emergence of Trust Networks under Uncertainty - Implications for Internet
Author: Coye Cheshire / Karen S. Cook
Abstract: Computer-mediated interaction on the Internet provides new opportunities to examine the links between reputation, risk, and the development of trust between individuals who engage in various types of exchange. In this article, we comment on the application of experimental sociological research to different types of computer-mediated social interactions, with particular attention to the emergence of what we call ’trust networks' (networks of those one views as trustworthy). Drawing on the existing categorization systems that have been used in experimental social psychology, we relate the various forms of computer-mediated exchange to selected findings from experimental research. We develop a simple typology based on the intersection of random versus fixed-partner social dilemma games, and repeated versus one-shot interaction situations. By crossing these two types of social dilemma games and two types of interaction situations, we show that many forms of Internet exchange can be categorized effectively into four mutually exclusive categories. The resulting classification system helps to integrate the existing research on trust in experimental social psychology with the emerging field of computer-mediated exchange.
Title: Local Virtuality in a High-Tech Networked Organization
Author: Anabel Quan-Haase / Barry Wellman
Abstract: What are networked organizations? The focus of discussions of the networked organization has been on the boundary-spanning nature of these new organizational structures. Yet, the role of the group in these networked organizations has remained unclear. Furthermore, little is known about how computer-mediated communication is used to bridge group and organizational boundaries. In particular, the role of new media in the context of existing communication patterns has received little attention. We examine how employees at a high-tech company, referred to as KME, communicate with members of the work group, other colleagues in the organization, and colleagues outside the organization to better understand their boundary-spanning communications.
Title: How May Virtual Communication Shape Cooperation in a Work Team? A Formal Model Based on Social Exchange Theory
Author: Andreas Flache
Abstract: This paper addresses theoretically the question how virtual communication may affect cooperation in work teams. The degree of team virtualization, i.e. the extent to which interaction between team members occurs online, is related to parameters of the exchange. First, it is assumed that in online interaction task uncertainties are higher than in face-to-face contacts. Second, the gratifying value of peer rewards is assumed to be lower in online contacts. Thirdly, it is assumed that teams are different in the extent to which members depend on their peers for positive affections, operationalized by the extent to which team members are interested in social relationships for their own sake, independently from their work interactions. Simulation results suggest both positive and negative effects of team virtualization on work-cooperation.
Title: Trust and Community in Open Source Software Production
Author: Margit Osterloh / Sandra Rota
Abstract: Open source software production is a successful new innovation model which disproves that only private ownership of intellectual property rights fosters innovations. It is analyzed here under which conditions the open source model may be successful in general. We show that a complex interplay of situational, motivational, and institutional factors have to be taken into account to understand how to manage the `tragedy of the commons' as well as the `tragedy of the anticommons'. It is argued that the success of this new innovation model is greatly facilitated by a well balanced portfolio of intrinsic and extrinsic motivation, low costs for contributors and governance mechanisms that do not crowd out intrinsic motivation.
Title: Crime, Law and the Internet
Author: Eric Hilgendorf
Abstract: After some introductory remarks on the German legal system and German legal politics, the main forms of datanet crime on the Internet are sketched. After that, one of the most important Internet-cases of the last decade, the CompuServe case, is discussed in some detail. One of the main problems of datanet crime is its global reach. The world-spanning nature of the cyberspace significantly enlarges the ability of offenders to commit crimes that will affect people in a variety of other countries. On the other hand, the jurisdiction of national criminal law cannot be expanded at will by any single nation. A transnational criminal law for the Internet is possible but should be restricted to the defence of universally (or nearly universally) accepted interests and values. In effect, it seems that the problems of computer-related crime on the Internet cannot be solved by criminal law alone.