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Annen, K. (2003). Social capital, inclusive networks, and economic performance. Journal of Economic Behavior & Organization 50(4), 449-463.

Empirical studies show that the relationship between social capital and economic performance is ambiguous. The paper points to the potential trade-off between the sustainability of self-enforcement and the magnitude of gains from trade in social networks as an explanation. Based on an infinitely
repeated multi-player prisoners’ dilemma it is shown how self-enforcement of cooperation within a network is influenced by its inclusiveness, its communication capacity, and the complexity of the exchange setting. The paper shows that inclusive social capital can combine both low enforcement
costs and high gains from trade even in a complex exchange setting.

Authors

Annen, Kurt

Kurt Annen is Associate Professor of Economics at the Department of Economics of the University of Guelph. Areas of Specialization Applied Game Theory, Economic Development, New Institutional Economics, Foreign Aid Kurt Annen joined the Department of Economics at the University of Guelph in 2003....

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