The power of trust, incentives, and exclusion

Charles A. Holt

Chapter 9 in The Origins and Evolution of Experimental Economics, 2026, pp 164-180 from Edward Elgar Publishing

Abstract: Much of the experimental economics literature has been concerned with marginal factors like “punishment points” that induce conditional cooperation and norms associated with prosocial behavior. This chapter takes a different perspective: that discrete changes like switching suppliers and sharply scaling up connections with trusted business partners are the primary way that organizations evolve in a market economy. Competition for inclusion in trading networks can slice through asymmetric information roadblocks. In Jamestown, United States, and Xiaogang, China, it was a change in property rights (exclusion from a common field) that solved free-riding issues in the shadow of famine.

Keywords: Networking; Choice of Partners Games; Public Goods; Free-Riding; Jamestown; Xiaogang Village (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035356256
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