Trust and Efficiency

dc.contributor.author	Chami, Ralph	en_US
dc.contributor.author	Fullenkamp, Connel	en_US
dc.date.accessioned	2010-03-09T15:42:20Z
dc.date.available	2010-03-09T15:42:20Z
dc.date.issued	2001	en_US
dc.identifier.uri	http://hdl.handle.net/10161/2040
dc.description.abstract	uses the economics of altruism to show how the presence or absence of trust between employees of the firm affects economic efficiency. We develop a simple model in which trust is defined as reciprocal altruism between two employees and show that the presence of trust improves efficiency by mitigating principal-agent problems. Firms characterized by trust between employees are more profitable and have higher levels of employee satisfaction than firms from which trust is absent. We also compare the effects of trust to those of profit-sharing plans and argue that cultivating trust in the firm is easier to implement.	en_US
dc.format.extent	255054 bytes
dc.format.mimetype	application/pdf
dc.language.iso	en_US
dc.publisher	SSRN eLibrary	en_US
dc.title	Trust and Efficiency	en_US
dc.type	Journal Article	en_US
dc.department	Economics