The economic dimension of trust

The concept of information asymmetry in economics describes situations where, in a group of at least two people, one party possesses more information than the other. I’d like to give an example using the phone you’re holding.

The brand, the manufacturer of the device, knows the quality of the product, but you, the consumer, lack sufficient information. Trust comes into play at this stage, and as the consumer, you fill in the missing information with your trust in the brand, and this decision leads to the brand telling the truth.

Regardless of who is on the other side, trust doesn’t arise on its own. From a brand’s perspective, examples of building and maintaining trust include:

advertising
offering a product warranty
improving the customer service experience
supporting the quality of the product itself and its production line with certificates and documentation

As these examples demonstrate, consumer trust is more than just a moral imperative for brands; it’s also an investment that requires careful consideration to ensure its continued existence.

The amount a brand must spend to gain consumer trust can be in the millions; because brand managers know one thing very well: consumers who trust a brand once will return to it.

In short, trust is an invisible yet invaluable force in the economy, and the purpose of the trust tax paid by brands is to protect this power.

I’d like to offer some simple and comparative examples.

In the tech world, Apple has succeeded in creating the impression that its product is safe despite high prices thanks to its consistent product experience, which it has invested in for many years. In contrast, some competing brands in the same category have discontinued security updates and after-sales service, and their names have been associated with privacy violations, damaging trust in them, or even completely destroying it.

When it comes to reliable, durable, and high-quality car engines, Toyota is one of the first brands that comes to mind. With its long-lasting engines and low failure rates, it’s a brand that many people consider worthy of the trust tax. While the scandals that have led to the discrediting of some competitors and the discovery of false emissions data are a stark example of trusting the wrong person.

Another and final example comes from banking. While the transparent fee policies and quick solutions offered by digital banks increase trust in the bank and the banking system, the hidden transaction and operating fees traditionally maintained by some banks and the commission demands that arise at unexpected times are also factors that reduce trust.

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