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The Coevolution of Trust and Institutions in Anonymous and Non-anonymous Communities

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Author Info
Werner Güth ()
Axel Ockenfels ()

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Abstract

We report on a research program that employs the indirect evolutionary approach to analyze how the institutional environment drives the evolution of trust and trustworthiness through the evolution of moral preferences, and how in turn the evolution of preferences shapes the evolution of the rules of the game. In particular, we describe how the ability to detect trustworthiness in non-anonymous communities supports the evolution of trust and thus crowds out legal institutions. If anonymous interaction prevents type detection, legal institutions such as courts and legal insurance may play a decisive role for the emergence of trust.

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Paper provided by Max Planck Institute of Economics, Strategic Interaction Group in its series Discussion Papers on Strategic Interaction with number 2002-07.

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Length: 21 pages
Date of creation: Mar 2002
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Handle: RePEc:esi:discus:2002-07

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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.:
  1. Werner Güth & Axel Ockenfels, . "The Coevolution of Morality and Legal Institutions - An indirect evolutionary approach -," Discussion Papers on Strategic Interaction 2002-06, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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  2. Werner Gueth & Axel Ockenfels, 2000. "Evolutionary Norm Enforcement," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
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  3. Axel Ockenfels, 2002. "New Institutional Structures on the Internet: The Economic Design of Online Auctions," Discussion Papers on Strategic Interaction 2002-08, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  4. Brosig, Jeannette, 2002. "Identifying cooperative behavior: some experimental results in a prisoner's dilemma game," Journal of Economic Behavior & Organization, Elsevier, vol. 47(3), pages 275-290, March. [Downloadable!] (restricted)
  5. Selten, Reinhard, 1983. "Evolutionary stability in extensive two-person games," Mathematical Social Sciences, Elsevier, vol. 5(3), pages 269-363, September. [Downloadable!] (restricted)
  6. Ockenfels, Axel & Selten, Reinhard, 2000. "An Experiment on the Hypothesis of Involuntary Truth-Signalling in Bargaining," Games and Economic Behavior, Elsevier, vol. 33(1), pages 90-116, October. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Werner Güth & Axel Ockenfels, . "The Coevolution of Morality and Legal Institutions - An indirect evolutionary approach -," Discussion Papers on Strategic Interaction 2002-06, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
    Other versions:
  2. Werner Güth & Anthony ZIEGELMEYER & Loreto LLORENTE ERVITI, 2004. "Quantity Competition under Asymmetric Information without Common Priors: An Indirect Evolutionary Approach," Discussion Papers on Strategic Interaction 2003-32, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
  3. Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Working Paper Series 2005:2, Uppsala University, Department of Economics. [Downloadable!]
    Other versions:
  4. Gary Bolton, 2003. "How Effective are Electronic Reputation Mechanisms?," Working Papers gb1, The Pennsylvania State University, Laboratory for Economic Mangement and Auctions, revised 01 Aug 2003. [Downloadable!]
  5. Gary E. Bolton & Elena Katok & Axel Ockenfels, 2003. "How Effective are Electronic Reputation Mechanisms? An Experimental Investigation," Working Paper Series in Economics 3, University of Cologne, Department of Economics. [Downloadable!]
  6. Friederike Mengel & Axel Ockenfels & Werner Güth, 2006. "The Dynamics of Trust and Trustworthiness on EBay. An Evolutionary Analysis of Buyer Insurance and Seller Reputation," Discussion Papers on Strategic Interaction 2006-03, Max Planck Institute of Economics, Strategic Interaction Group. [Downloadable!]
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