Anderlini, Luca; Terlizzese, Daniele - Istituto Einaudi per l'Economia e la Finanza (EIEF) - 2009
We build a simple model of trust as an equilibrium phenomenon, departing from standard "selfish" preferences in a minimal way. Agents who are on the receiving end of an other to transact can choose whether to cheat and take away the entire surplus, taking into account a "cost of cheating." The...