ake a mental list of the various “diversity groups” to which you belong. Then th

Question

ake a mental list of the various “diversity groups” to which you belong. Then think about the various stereotypes that may attach to your groups.

Has there ever been a time when you felt you were discriminated against on the basis of your race, gender, religion, cultural background, ethnicity or other social group membership? How did you handle it? Would you handle it the same way again?

Can a corporate entity have “interests”? How does one determine what the interests of a corporation are?

Using your knowledge of trust and Deutsch’s theory discuss whether competition itself creates changes in trust.

Explanation / Answer

Personal Discrimination Experience

There are many different kinds of bias in the world. I thought that there is no discrimination before I actually had discrimination. I have felt discrimination many times in my life. Most of my experiences are from when I visited the U.S. Before my experiences, I thought Westerners, especially Americans, think about discrimination more than Japanese or other Asians. However, this is not true. I am going to talk about my experiences with race discrimination and language discrimination.

Firstly, I experienced race discrimination for the first time because I am Indian. When I visited the UK, I stayed at a hotel. There was a big hot pool that every guest can use. My mother and I went there, and one old lady already there. She saw us, and she said:" They are Indo so they shouldn't be here." I was shocked because we paid the same cost as her. And also we were guests of the hotel. If she does not like Indian that is not our problem. She just should not be mixed up about Indian or India.

Secondly, I have an experience with language discrimination, because I could not speak English well. This was the first time that I was cheated by someone. When I visited Hawaii I went to a small shop. I bought magnets that totalled about 18 dollars. However, the cashier said that the total was more than 30 dollars. Therefore, I paid the charge. At that time, I could not speak English, so I just paid. After I got back to my hotel, I asked my uncle and he said, "the cashier knew that you can not speak English, so they got extra money from you." I was very angry because I thought I was mocked by whites. I know that different languages are difficult. Therefore, I think it is difficult to eliminate language discrimination. However, cheating is not good. Nobody should cheat others with language discrimination.

Finally, I thought, that all races are equal before I felt discrimination. I thought that everyone thinks everyone must treat equally. However, some people are still treated differently. I think we must treat everyone equally even though people speak different languages or have different colours of skin. In India, there is discrimination often, but we do not think about it seriously. We should think about it more. If everyone thinks about it more seriously, discrimination will slowly disappear. I think that nobody should be hurt by any kind of discrimination.

Trust is a key ingredient of social life. We teach children to trust each other and we all understand that in a world where social relations are governed by trust, life is simpler and more pleasant. However, when we study social interactions as economists, we tend to focus almost exclusively on selfish motives. In recent years, however, sociologists and economists have started paying attention to social interactions based on trust and fairness and the cooperative behaviour induced by them. In these models, trust induces informal contracts that may efficiently replace legally enforced ones. In particular, if an agent trusts that he is being treated fairly by his trading partner, an efficient amount of relationship-specific investment will be fostered. This is one of the general conclusions drawn from the literature on relational contracting, which we want to bring to a test. To be able to do this we need the object of trust, as recorded in the evidence, to be an individual or a specific institution.

To the best of our knowledge, there is very little if any empirical evidence on trust towards individuals or institutions, and its impacts on these individuals’ or firms’ behaviour. The present paper tries to fill this gap by evaluating how trust impacts the design, production and exchange of complex products, namely the blueprints resulting from innovative investments by first tier upstream suppliers into the production of automobiles.

Morton Deutsch's theory and research on cooperation and competition is a profound example of his mentor's, Kurt Lewin, admonition "Nothing is as practical as a good theory ." Hundreds of studies conducted by various social scientists have developed and extended the theory. Findings on the effects of cooperation and competition are among the most consistent and strongest in the social sciences. Thousands of educators and other practitioners are applying the theory in their professional work and transforming their organizations. Much has been done, much more needs to be done. Cooperative, synergistic teamwork has driven the theory's development. Stimulated by scholars at Lewin's Center for Group Dynamics and elsewhere, Deutsch formulated his theory in his dissertation research published in 1949. the theory benefited a great deal from collaborative work with many colleagues and graduate students, especially at Teacher's College at Columbia University, where beginning in 1963 he headed the social psychology program. The resulting extensive empirical research base gives the theory credibility and power uncommon in social sciences.

Conclusion: Trust is an important ingredient in almost all meaningful social and economic interactions. While, largely due to availability of data, most empirical research on trust has focused on the willingness of individuals to trust others in general. We are here able to shed light on the role of trust as fostered or squandered in pairwise economic relationships. We first propose and model an intuitive definition for trust: In a bilateral relationship involving a hold-up situation, we define trust the belief by the party with the weaker bargaining power, that its counterpart will not exploit its stronger bargaining position by appropriating the whole surplus from the relationship. We are then able to document how an OEM’s investment in supplier trust, characterized by the OEM decision to forgo (often short-term) opportunities of appropriating rent, can pay off. Contractual relationships characterized by higher levels of trust are associated with significantly higher investment by suppliers, resulting in fewer failures and callbacks on the parts supplied.

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