If transaction costs are thought of as friction in the economy, then trust can be seen as an extremely effective lubricant. To quote Arrow (1974: 23): 'It saves a lot of trouble to have a fair degree of reliance in other people's word.'

DEFINE: Introduces trust as a friction-reducing mechanism in economic terms, framing it metaphorically as lubricant against transaction cost friction. Builds on: "Transaction costs resemble friction in their practical significance"

Diego Gambetta, Trust - Making and Breaking…, loc. 2522