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Trust And Culture

Author

Listed:
  • THORSTEN JANUS

    (Department of Economics and Finance, University of Wyoming, Dept. 3985, 1000 E. University Avenue, Laramie, WY 82071, USA)

Abstract

Large populations can gain from economies of scale but lose internal trust due to diluted information. This creates an optimal group size. However, trusting strangers who claim to be members invites outsiders to disguise as insiders and abuse extended trust. Thus, if cultural diversity can raise the imitation cost it can promote cooperation. Even so, however, scale economies are lost when the population subdivides and the cultural boundaries may have to be enforced to prevent assimilation. The model is consistent with norms against inter-cultural marriage and episodic boundary-reinforcing conflict where formal institutions for contract enforcement are weak.

Suggested Citation

  • Thorsten Janus, 2009. "Trust And Culture," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 11(02), pages 199-206.
    • Handle: RePEc:wsi:igtrxx:v:11:y:2009:i:02:n:s021919890900225x
    DOI: 10.1142/S021919890900225X
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    References listed on IDEAS

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    1. Alberto Alesina & Eliana La Ferrara, 2005. "Ethnic Diversity and Economic Performance," Journal of Economic Literature, American Economic Association, vol. 43(3), pages 762-800, September.
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    More about this item

    Keywords

    Culture; social capital; repeated prisoners' dilemma; JEL Classification: D82; JEL Classification: D86; JEL Classification: O17;
    All these keywords.

    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • C0 - Mathematical and Quantitative Methods - - General
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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