Love Thy Neighbor: Bonding versus Bridging Trust

Abstract: We study how trust is generated in society. In a two-sector

model, we analyze two communities. In the bonding community people do not

trust people outside their regular networks. In the bridging community people

choose to trust strangers when they meet them. The hypothesis is that when

trust is only bonding, it cannot accumulate. Our theoretical contribution is to

show that when trust is only bonding then the economy’s level of trust moves

to an unstable equilibrium that may under certain conditions ‡uctuate forever.

If, however, trust is also bridging, then trust will accumulate. Future research

should seek to establish the appropriate institutional framework for establishing

the optimal mix between both bonding and bridging social capital in society.

Keywords: Trust; two-sector model; chaos (search for similar items in EconPapers)
JEL-codes: A12 C61 D90 O41 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2005-09-02
New Economics Papers: this item is included in nep-evo and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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