DP5067 Is It Trust we Model? An Attempt to Calculate the Non-Calculative

Author(s): Stephanie Rosenkranz, Utz Weitzel
Publication Date: May 2005
Keyword(s): alliances, cooperation, focal points, framing, trust
JEL(s): C72, D74, D80, Z13
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5067

In this paper we characterize a situation in which non-calculative trust has to play a role in the decision to cooperate. We then analyse the given situation in game theoretical terms and distinguish those aspects of players? decisions that are cooperative from those that may be interpreted as being trustful. We argue that the cooperative aspect relates to incentives while the trustful (and thus non-calculative) aspect of the decision is related to the framing of the situation.