Trust or assurance: Guanxi as a triadic relationship

The literature on guanxi typically regards guanxi relations, like network relations more generally, as chains of dyadic trust exchanges. The focus of the paper is on both of these aspects of guanxi and is skeptical of the veracity of each of them. The literature on trust is now enormous and conceptualization of trust quite confused. The paper agrees with Williamson (1993) that trust is irrelevant to economic exchanges but on different grounds than Williamson proposes. Where contract is legally enforced bi-lateral relations find assurance in institutional arrangements and trust is redundant in the exchanges between participants. In the absence of legal enforcement visibility of exchanges to third parties provides assurance to participants. This is because perception of defection and exploitation could lead to various sanctions including expulsion from the network of the offending member. Again, trust is redundant to members of the network in such cases. Unequal relations within guanxi networks shall also be discussed in the presentation in order to indicate a further aspect of the irrelevance and absence of trust and the particular nature of assurance under conditions of triadic relationships.