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Information cost, learning, and trust

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In this short paper, I put forward an argument about trust based upon an information costperspective. I argue that, in different contexts, different origins of trust come to dominate. Thisis so, because different possible origins of trust have a different information cost, and differentcontexts have different information availability. Agents learn about this, and place their trustaccordingly. I provide an empirical example, and list some traits of information availabilitybetween geographically proximate firms. The information cost argument explains why aparticular way of trusting is prevalent in some proximate ‘communities’ of agents.

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Mark Lorenzen

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