Social Trust, Cooperation, and Human Capital
The importance of social trust on economic growth has been suggested by many empirical works. This paper formalizes the concept of social trust and studies its formation process in a game theoretic setting. It provides plausible explanations for a wide range of empirical and experimental findings. The main results of the paper are as follows. For utility-maximizing players, cooperation arises in one-period prisoner’s dilemmas if and only if there is social trust. The amount of social trust in a given game is determined by the distribution of players’ cooperative tendency. Cooperative tendency is in essence a component of human capital distinct from cognitive ability. Its investment, however, is typically not efficient because the social returns are always strictly larger than individual returns. This positive investment externality leads to multiple equilibria in social trust formation, but a unique stable equilibrium may also exist. The different effects of legal institutions, information structueand education programs on social trust are also investigated.
|Date of creation:||Dec 2003|
|Date of revision:||Jan 2004|
|Publication status:||Published in SMU Economics and Statistics Working Paper Series|
|Contact details of provider:|| Postal: 90 Stamford Road, Singapore 178903|
Phone: 65-6828 0832
Fax: 65-6828 0833
Web page: http://www.economics.smu.edu.sg/
More information through EDIRC
|Order Information:|| Email: |
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.:
- Eliana Garces & Duncan Thomas & Janet Currie, 2002.
"Longer-Term Effects of Head Start,"
American Economic Review,
American Economic Association, vol. 92(4), pages 999-1012, September.
- Eliana Garces & Duncan Thomas & Janet Currie, 2000. "Longer Term Effects of Head Start," Working Papers 00-20, RAND Corporation.
- Garces, E. & Thomas, D. & Currie, J., 2000. "Longer Term Effects of Head Start," Papers 00-20, RAND - Labor and Population Program.
- Eliana Garces & Duncan Thomas & Janet Currie, 2000. "Longer Term Effects of Head Start," NBER Working Papers 8054, National Bureau of Economic Research, Inc.
- Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-64, May.
- Glaeser, Edward Ludwig & Laibson, David I. & Scheinkman, Jose A. & Soutter, Christine L., 2000.
4481497, Harvard University Department of Economics.
- Martin W. Cripps & George J. Mailath & Larry Samuelson, 2002.
"Imperfect Monitoring and Impermanent Reputations,"
PIER Working Paper Archive
03-016, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania, revised 30 May 2003.
- Cripps,M.W. & Mailath,G.J. & Samuelson,L., 2002. "Imperfect monitoring and impermanent reputations," Working papers 17, Wisconsin Madison - Social Systems.
- Martin Cripps & George J Mailath & Larry Samuelson, 2010. "Imperfect Monitoring and Impermanent Reputations," Levine's Working Paper Archive 618897000000000060, David K. Levine.
- James Jr., Harvey S., 2002. "The trust paradox: a survey of economic inquiries into the nature of trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 47(3), pages 291-307, March.
- Frank, Robert H, 1987. "If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience?," American Economic Review, American Economic Association, vol. 77(4), pages 593-604, September.
- Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2001.
"The Economic Approach to Social Capital,"
Harvard Institute of Economic Research Working Papers
1916, Harvard - Institute of Economic Research.
- Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, EconWPA.
- James J. Heckman, 1999.
"Policies to Foster Human Capital,"
NBER Working Papers
7288, National Bureau of Economic Research, Inc.
- James Heckman, 2000. "Policies to Foster Human Capital," Working Papers 0028, Harris School of Public Policy Studies, University of Chicago.
- James J. Heckman, 2000. "Policies to Foster Human Capital," JCPR Working Papers 154, Northwestern University/University of Chicago Joint Center for Poverty Research.
- Andreoni, James & Croson, Rachel, 2008.
"Partners versus Strangers: Random Rematching in Public Goods Experiments,"
Handbook of Experimental Economics Results,
- James Andreoni & Rachel Croson, 2001. "Partners versus Strangers: Random Rematching in Public Goods Experiments," Levine's Working Paper Archive 563824000000000132, David K. Levine.
- Andreoni,J. & Croson,R., 1998. "Partners versus strangers : random rematching in public goods experiments," Working papers 11, Wisconsin Madison - Social Systems.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1996.
"Trust in Large Organizations,"
NBER Working Papers
5864, National Bureau of Economic Research, Inc.
- Rotemberg, Julio J, 1994. "Human Relations in the Workplace," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 684-717, August.
- Kandel, E. & Lazear, E.P., 1990.
"Peer Pressure and Partnerships,"
90-07, Rochester, Business - Managerial Economics Research Center.
- Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982.
"Rational cooperation in the finitely repeated prisoners' dilemma,"
Journal of Economic Theory,
Elsevier, vol. 27(2), pages 245-252, August.
- David Kreps & Paul Milgrom & John Roberts & Bob Wilson, 2010. "Rational Cooperation in the Finitely Repeated Prisoners' Dilemma," Levine's Working Paper Archive 239, David K. Levine.
- Larry Samuelson, 2003. "Imperfect Monitoring and Impermanent Reputations," Theory workshop papers 505798000000000030, UCLA Department of Economics.
- Ernst Fehr & Simon Gaechter, .
"Fairness and Retaliation: The Economics of Reciprocitys,"
IEW - Working Papers
040, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr & Simon Gächter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 159-181, Summer.
- Ernst Fehr & Simon Gaechter, 2000. "Fairness and Retaliation: The Economics of Reciprocity," CESifo Working Paper Series 336, CESifo Group Munich.
- Rafael Rob & Peter Zemsky, 2002.
"Social Capital, Corporate Culture, and Incentive Intensity,"
RAND Journal of Economics,
The RAND Corporation, vol. 33(2), pages 243-257, Summer.
- Rafael Rob & Peter Zemsky, . "Social Capital, Corporate Culture and Incentive Intensity," Penn CARESS Working Papers 7380c2f90d0b2f362ad71f139, Penn Economics Department.
- Alesina, Alberto & La Ferrara, Eliana, 2002.
"Who trusts others?,"
Journal of Public Economics,
Elsevier, vol. 85(2), pages 207-234, August.
- Iris Bohnet & Bruno S. Frey & Steffen Huck, . "More Order with Less Law: On Contract Enforcement, Trust, and Crowding," IEW - Working Papers 052, Institute for Empirical Research in Economics - University of Zurich.
- Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
- Bar-Gill, O. & Fershtman, C., 2000. "The Limit of Public Policy : Endogenous Preferences," Discussion Paper 2000-71, Tilburg University, Center for Economic Research.
- Avinash Dixit, 2001.
"On Modes of Economic Governance,"
CESifo Working Paper Series
589, CESifo Group Munich.
- Weimann, Joachim, 1994. "Individual behaviour in a free riding experiment," Journal of Public Economics, Elsevier, vol. 54(2), pages 185-200, June.
- Stephen Knack & Philip Keefer, 1997. "Does Social Capital Have an Economic Payoff? A Cross-Country Investigation," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1251-1288.
- Jonathan Temple & Paul A. Johnson, 1998. "Social Capability and Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 965-990.
- Palfrey, Thomas R & Prisbrey, Jeffrey E, 1997. "Anomalous Behavior in Public Goods Experiments: How Much and Why?," American Economic Review, American Economic Association, vol. 87(5), pages 829-46, December.
When requesting a correction, please mention this item's handle: RePEc:siu:wpaper:01-2004. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (QL THor)
If references are entirely missing, you can add them using this form.