Social Trust and Economic Governance

• Main Author: HUANG, Fali
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2004
• Subjects: Behavioral Economics; Business Law, Public Responsibility, and Ethics; Political Economy
• Online Access: https://ink.library.smu.edu.sg/soe_research/1197; https://ink.library.smu.edu.sg/context/soe_research/article/2196/viewcontent/trustgovernancenew.pdf
• Institution: Singapore Management University

The paper investigates the dynamic relationship between social trust and economic governance using a principal-agent model with stochastic returns. To mitigate the inherent moral hazard problem both intrinsic and extrinsic incentives are useful. The cooperative tendency of an agent measures his intr...