Influence of power imbalance and actual vulnerability on trust formation

Purpose: Leveraging Emerson’s theory of power and motivated reasoning, this study aims to explore how the net power of an individual and actual, instead of perceived, vulnerability results in asymmetric trust and distrust development in a dyadic relationship. Design/methodology/approach: Based on extant literature and gaps in the literature, this conceptual paper hypothesises and proposes trust formation based on power dynamics and vulnerability. Findings: This research extends the knowledge base by exploring the role of actual vulnerability over perceived vulnerability in trust formation and distrust formation. Research limitations/implications: The research propositions imply that the dyadic trust formation process is not rational, and trust itself is not symmetrical but asymmetrical. The net power possessed by one individual over the other drives trust. Net power balance determines the actual vulnerability of the focal individual, and then the individual, through motivated reasoning, trusts or distrusts another individual. Scholars, going forward, could explore how trust formation varies at group and firm levels. Originality/value: Extant literature has not explored the role of power imbalance in determining actual (versus perceived) vulnerability that influences trust formation between parties. The conceptual paper fills this gap.