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Trust and arena size: expectations, institutions, and general trust, and critical population and group sizes

Published online by Cambridge University Press:  28 May 2013

WOLFRAM ELSNER  and
HENNING SCHWARDT
WOLFRAM ELSNER*
Affiliation:
Institute of Institutional and Innovation Economics (IINO), University of Bremen, Bremen, Germany
HENNING SCHWARDT*
Affiliation:
Institute of Institutional and Innovation Economics (IINO), University of Bremen, Bremen, Germany
*
*Email: welsner@uni-bremen.de
**Email: schwardt@uni-bremen.de
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Abstract

While trust and group size in socio-economic processes have been well investigated separately, approaches to synergize them have been rare. After addressing basic conditions for institutionalized cooperation, the agency capability of preferential mixing is introduced in order to determine the carrier group of an institution of cooperation. That platform typically assumes a meso-size smaller than the initial arena. Habituation and generalization within and across overlapping platforms then may lead to first contextual trust. This has to be carried over from individual platforms into the larger public of the whole economy to constitute general trust. The practical relevance of this analysis is illustrated through the fact that even superficially similar economies show different socio-economic performance and trajectories. Our results suggest investigating their inner deep structure of overlapping meso-sized platforms as a critical factor.

Type
Research Article
Information
Journal of Institutional Economics , Volume 10 , Issue 1 , March 2014 , pp. 107 - 134
Copyright
Copyright © Millennium Economics Ltd 2013 

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