Trustworthiness can be conveyed by sending a costly signal in advance. In an experiment, we find that the smaller the percentage of trustworthy people in a group, the higher is their percentage of signaling. The introduction of signaling has strong distributional effects. It may be efficient...

Coleman (1990) describes 'calculative trust'. He states that, in order to trust, the value of trust has to be larger than the value of mistrust. So if subjects have (not personally but on average) rational expectations about the trustworthiness of their transaction partners, we should expect the...