I just posted a survey on game-theoretic methods of understanding network formation under the hypothesis of mutual consent in link formation. The introduction of consent in link formation imposes a coordination problem in the network formation process. This survey explores the conclusions from this theory and the various methodologies to avoid the main pitfalls.The main…
Category: Trust
Two volume book on the social division of labour is now published
Both volumes are now published with Palgrave-Macmillan.
Failure in the global relational economy
Yesterday, news broke that the SEC is accusing Goldman-Sachs of exploiting its middleman position for fraudulent purposes. This case is a striking example of what failures the relational or network structure of the global economy can cause without proper regulation and governance. In fact, this case has several important implications for our understanding of the global economy.
Trust in networks
Recently there has been a small surge in the economics literature addressing the role of trust in the economy. Experiments have shown that trust is extremely important for understanding economic processes. Trust does not fit very well with the traditional concept of “homo economicus”: Rational behavior is not trusting. The building and confirmation of trust…