Trust, Reciprocity, and Other-Regarding Preferences: Groups Vs. Individuals and Males Vs. Females

Abstract

Trust and reciprocity have attracted increasing attention as topics of research. Arrow (1974) explained that, because of asymmetric information, incomplete contracts, and the prohibitive transaction costs of perfect monitoring, much economic activity may require trust and reciprocity in order for mutual gains from exchange to be realized. And reciprocity may be essential to development of a modern economy in which much effort of highly-skilled labor cannot be effectively monitored.