Trust and social collateral
Webeconomic development when reliable forms of collateral are hard to come by. In fact many informal institutions already exist to make use of social networks. One widespread example is the rotating savings and credit association, which also uses social sanctions to curb default, see Ardener (1964). WebThis paper builds a theory of trust based on informal contract enforcement in social networks. In our model, network connections between individuals can be used as social …
Trust and social collateral
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WebJan 1, 2014 · Indeed, mutual trust, shared values, social networks, peer monitoring and other ingredients of social capital are all prominent features and prerequisites of collective lending (Postelnicu et al ... WebJun 27, 2007 · In our model, relationships between individuals generate social collateral that can be used to control moral hazard when agents interact in a borrowing relationship. We define trust between two agents as the maximum amount that one can borrow from the other, and derive a simple reduced form expression for trust as a function of the social …
WebAbstract. This paper builds a theory of trust based on informal contract enforcement in social. networks. In our model, network connections between individuals can be used as … Web1 Social collateral: suggestive evidence This section presents evidence about social networks and informal contract enforcement. It is a well-documented fact that social networks are often used for trust-intensive exchanges.6 In this
WebWe de ne network-based trust as the highest amount one agent can borrow from another agent, and derive a reduced-form expression for this quantity which we then use in three applications. (1) We predict that dense networks generate bonding social capital that allows transacting valuable assets, while loose networks create bridging social capital that … WebJan 1, 2014 · Researchers recommend this social relation as a means of social capital, which helps the clients be eligible for getting a microloan without any material collateral (Geleta, 2014). The pioneer of ...
WebCiteSeerX - Document Details (Isaac Councill, Lee Giles, Pradeep Teregowda): This paper builds a theory of trust based on informal contract enforcement in social networks. In our …
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