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Law v. Trust

Larry E. Ribstein (Deceased)

University of Illinois College of Law; PERC - Property and Environment Research Center

October 23, 2000

George Mason Law & Economics Research Paper No. 00-38

The special concept of trust does not provide a distinct justification for mandatory legal rules. Although regulation might lead parties to decide to rely on others, it does not produce the sort of transaction-cost-reducing trust that should matter for public policy - that is, trust based on altruism, norms, personal relationships, and social capital. Moreover, using mandatory rules to increase trust may have precisely the opposite effect of increasing distrust and undermining trust-creation devices. Thus, trust provides an additional argument in favor of enforcing contracts.

Number of Pages in PDF File: 34

JEL Classification: D6, G3, K0, K2, K3, L5

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Date posted: October 26, 2000  

Suggested Citation

Ribstein (Deceased), Larry E., Law v. Trust (October 23, 2000). George Mason Law & Economics Research Paper No. 00-38. Available at SSRN: http://ssrn.com/abstract=247224 or http://dx.doi.org/10.2139/ssrn.247224

Contact Information

Larry Edward Ribstein (Deceased) (Contact Author)
University of Illinois College of Law ( email )
504 E. Pennsylvania Avenue
Champaign, IL 61820
United States
217-244-9881 (Phone)
217-244-1478 (Fax)

PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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