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To trust or to control: Informal value transfer systems and computational analysis in institutional economics

Author

Listed:
  • Claudius Graebner

    (Institute for Comprehensive Analysis of the Economy, Johannes Kepler University Linz, Austria)

  • Wolfram Elsner

    (Institute for Institutional and Innovation Economics, University of Bremen, Germany)

  • Alexander Lascaux

    (Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia)

Abstract

This paper 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 (ITVS). We find that, how and in which timeline general trust and social control interact in order to make ITVS work, become stable and highly effective. The case shows how computational models may help (1) to operationalize institutional theory and to clarify the functioning of institutions, (2) to test the logical consistency of alternative hypotheses about institutions, and (3) to relate institutionalist theory with other paradigms and to practice an interested pluralism.

Suggested Citation

  • Claudius Graebner & Wolfram Elsner & Alexander Lascaux, 2017. "To trust or to control: Informal value transfer systems and computational analysis in institutional economics," ICAE Working Papers 74, Johannes Kepler University, Institute for Comprehensive Analysis of the Economy.
    • Handle: RePEc:ico:wpaper:74
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    References listed on IDEAS

    as
    1. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201703080800001022, Iowa State University, Department of Economics.
    2. Dosi, Giovanni & Fagiolo, Giorgio & Roventini, Andrea, 2010. "Schumpeter meeting Keynes: A policy-friendly model of endogenous growth and business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 34(9), pages 1748-1767, September.
    3. Leigh Tesfatsion, 2017. "Modeling economic systems as locally-constructive sequential games," Journal of Economic Methodology, Taylor & Francis Journals, vol. 24(4), pages 384-409, October.
    4. Claudius Gräbner & Catherine S. E. Bale & Bernardo Alves Furtado & Brais Alvarez-Pereira & James E. Gentile & Heath Henderson & Francesca Lipari, 2019. "Getting the Best of Both Worlds? Developing Complementary Equation-Based and Agent-Based Models," Computational Economics, Springer;Society for Computational Economics, vol. 53(2), pages 763-782, February.
    5. Caiani, Alessandro & Godin, Antoine & Caverzasi, Eugenio & Gallegati, Mauro & Kinsella, Stephen & Stiglitz, Joseph E., 2016. "Agent based-stock flow consistent macroeconomics: Towards a benchmark model," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 375-408.
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    7. Alexander Lascaux, 2015. "Crowding Out Trust in the Informal Monetary Relationships: The Curious Case of the Hawala System," Forum for Social Economics, Taylor & Francis Journals, vol. 44(1), pages 87-107, April.
    8. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201704300700001022, Iowa State University, Department of Economics.
    9. Tesfatsion, Leigh, 2017. "Modeling Economic Systems as Locally-Constructive Sequential Games," ISU General Staff Papers 201703280700001022, Iowa State University, Department of Economics.
    10. Wolfram Elsner, 2012. "The Theory of Institutional Change Revisited: The Institutional Dichotomy, Its Dynamic, and Its Policy Implications in a More Formal Analysis," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(1), pages 1-44.
    11. Elsner, Wolfram & Schwardt, Henning, 2014. "Trust and arena size: expectations, institutions, and general trust, and critical population and group sizes," Journal of Institutional Economics, Cambridge University Press, vol. 10(1), pages 107-134, March.
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    More about this item

    Keywords

    agent-based computational economics; evolutionary-institutional economics; informal value transfer systems; general trust; social control;
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