This paper examines how social relations and norms contribute to the emergence of generalized trust in economic action. Our core proposition is that the more positive the local social exchange relationship, the greater an actor’s propensity to place trust in strangers. Our research design...

This paper investigates trust behavior in situations where decision-makers are large groups and the decision mechanism is collective. Theories from behavioral economics and psychology suggest that trust in such situations may differ from interindividual trust. The experimental results here...

This paper emphasizes that rights facilitate decentralized use of information and computation. A dynamically efficient adjustment process that solves a private information linear resource allocation problem by a sequential auction of production and trading rights is presented. It is shown that...