To Trust or to Control: Informal Value Transfer Systems and Computational Analysis in Institutional Economics

Authored by Claudius Grabner, Wolfram Elsner, Alexander Lascaux

Date Published: 2018

DOI: 10.1080/00213624.2018.1469936

Sponsors: No sponsors listed

Platforms: No platforms listed

Model Documentation: Other Narrative

Model Code URLs: Model code not found

Abstract

This article illustrates the usefulness of computational methods for the investigation of institutions. As an example, we use a computational agent-based model to study the role of general trust and social control in informal value transfer systems (IVTS). We find that the terms of interaction between general trust and social control have an impact on how IVTS work, become stable, and prove highly effective. The case shows how computational models may help (i) to operationalize institutional theory and to clarify the functioning of institutions; (ii) to test the logical consistency of alternative hypotheses about institutions; and (iii) to relate institutionalist theory with other paradigms and to practice an interested pluralism.

Tags

Agent-Based Computational Economics Evolutionary-institutional economics General trust Informal value transfer systems Social control