Law V. Trust

Posted: 21 Jun 2001

See all articles by Larry E. Ribstein

Larry E. Ribstein

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

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Abstract

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.

Keywords: Trust, social capital, norms, fiduciary duties, internet, self-regulation

JEL Classification: K0, K2, K4, L2

Suggested Citation

Ribstein, Larry Edward, Law V. Trust. Boston University Law Review, Vol. 81, P. 553, June 2001. Available at SSRN: https://ssrn.com/abstract=273788

Larry Edward Ribstein (Contact Author)

University of Illinois College of Law (deceased)

PERC - Property and Environment Research Center

2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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