only on performance, but also on trust. Trust in the manager reduces an investor's perception of the riskiness of a given … investment, and allows managers to charge higher fees to investors who trust them more. Money managers compete for investor funds … by setting their fees, but because of trust the fees do not fall to costs. In the model, 1) managers consistently …

changes in investor trust, the model can account for the sharp decline of finance in the Great Depression, as well as its slow … trust and encouraged growth of financial income …