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Love Thy Neighbor: Bonding versus Bridging Trust

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Author Info
Poulsen, Odile () (Department of Economics, Aarhus School of Business)
Svendsen, Gert Tinggaard () (Aarhus University, Institut for Public Policy)

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Abstract

We study how trust is generated in society. In a two-sector

model, we analyze two communities. In the bonding community people do not

trust people outside their regular networks. In the bridging community people

choose to trust strangers when they meet them. The hypothesis is that when

trust is only bonding, it cannot accumulate. Our theoretical contribution is to

show that when trust is only bonding then the economy’s level of trust moves

to an unstable equilibrium that may under certain conditions ‡uctuate forever.

If, however, trust is also bridging, then trust will accumulate. Future research

should seek to establish the appropriate institutional framework for establishing

the optimal mix between both bonding and bridging social capital in society.

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Publisher Info
Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 05-7.

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Length: 28 pages
Date of creation: 02 Sep 2005
Date of revision:
Handle: RePEc:hhs:aareco:2005_007

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Related research
Keywords: Trust; two-sector model; chaos;

Other versions of this item:

Find related papers by JEL classification:
A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
C61 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming - - - Optimization Techniques; Programming Models; Dynamic Analysis
D90 - Microeconomics - - Intertemporal Choice and Growth - - - General
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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References listed on IDEAS
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. Benhabib, Jess & Nishimura, Kazuo, 1983. "Competitive Equilibrium Cycles," Working Papers 83-30, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
  2. Goenka, A. & Poulsen, O., 2002. "Indeterminacy and Labor Augmenting Externalities," Working Papers 02-9, University of Aarhus, Aarhus School of Business, Department of Economics.
    Other versions:
  3. Jean-Pierre Drugeon & Odile Poulsen & Alain Venditti, 2003. "On Intersectoral allocations, factors substitutability and multiple long-run growth paths," Economic Theory, Springer, vol. 21(1), pages 175-183, 01. [Downloadable!] (restricted)
  4. Drugeon, Jean-Pierre & Venditti, Alain, 2001. "Intersectoral external effects, multiplicities & indeterminacies," Journal of Economic Dynamics and Control, Elsevier, vol. 25(5), pages 765-787, May. [Downloadable!] (restricted)
  5. Nishimura, Kazuo & Yano, Makoto, 1994. "Social capital as a public good and an oscillatory behaviour," Ricerche Economiche, Elsevier, vol. 48(3), pages 185-193, September. [Downloadable!] (restricted)
  6. Anders Poulsen & Gert Svendsen, 2005. "Social Capital and Endogenous Preferences," Public Choice, Springer, vol. 123(1), pages 171-196, April. [Downloadable!] (restricted)
  7. Nishimura, Kazuo, 1985. "Competitive equilibrium cycles," Journal of Economic Theory, Elsevier, vol. 35(2), pages 284-306, August. [Downloadable!] (restricted)
  8. Kurrild-Klitgaard, Peter & Svendsen, Gert Tinggaard, 2003. " Rational Bandits: Plunder, Public Goods, and the Vikings," Public Choice, Springer, vol. 117(3-4), pages 255-72, December. [Downloadable!] (restricted)
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