publication . Preprint . 2005

Love Thy Neighbor: Bonding versus Bridging Trust

Poulsen, Odile; Svendsen, Gert Tinggaard;
Open Access
  • Published: 02 Sep 2005
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 f...
Subjects
ACM Computing Classification System: Data_MISCELLANEOUS
free text keywords: Trust; two-sector model; chaos, jel:A12, jel:C61, jel:D90, jel:O41
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