Information Cost, Learning, and Trust Lessons from Co-operation and Higher-order Capabilities amongst Geographically Proximate Firms

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    In this short paper, I put forward an argument about trust based upon an information cost perspective. I argue that, in different contexts, different origins of trust come to dominate. This is so, because different possible origins of trust have a different information cost, and different contexts have different information availability. Agents learn about this, and place their trust accordingly. I provide an empirical example, and list some traits of information availability between geographically proximate firms. The information cost argument explains why a
    particular way of trusting is prevalent in some proximate ‘communities’ of agents.
    Original languageEnglish
    Place of PublicationFrederiksberg
    PublisherDRUID - Danish Research Unit for Industrial Dynamics
    Number of pages38
    ISBN (Print)8778730597
    Publication statusPublished - 1998
    SeriesDRUID Working Paper

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