Information Cost, Learning, and Trust Lessons from Co-operation and Higher-order Capabilities Amongst Geographically Proximate Firms
AbstractIn this short paper, I put forward an argument about trust based upon an information cost perspective. I argue that, in different contexts, different origins of trust come to dominate. This is so, because different possible origins of trust have a different information cost, and different contexts have different information availability. Agents learn about this, and place their trust accordingly. I provide an empirical example, and list some traits of information availability between geographically proximate firms. The information cost argument explains why a particular way of trusting is prevalent in some proximate ‘communities’ of agents.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 98-21.
Date of creation: 1998
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Web page: http://www.druid.dk/
Trust; governance; information cost; organisational learning; industrial districts;
Find related papers by JEL classification:
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R39 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Other
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Nicolai J. Foss, 1998. "Firms and the Coordination of KnowledgeSome Austrian Insights," DRUID Working Papers 98-19, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Esben Sloth Andersen, 1998. "Escaping Satiation in an Evolutionary Model of Structural Economic Dynamics," DRUID Working Papers 98-9, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
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