The Coevolution of Trust and Institutions in Anonymous and Non-anonymous Communities

We report on a research program that employs the indirect evolutionary approach to analyze how the institutional environment drives the evolution of trust and trustworthiness through the evolution of moral preferences, and how in turn the evolution of preferences shapes the evolution of the rules of the game. In particular, we describe how the ability to detect trustworthiness in non-anonymous communities supports the evolution of trust and thus crowds out legal institutions. If anonymous interaction prevents type detection, legal institutions such as courts and legal insurance may play a decisive role for the emergence of trust. * Max Planck Institute for Research into Economic Systems, Strategic Interaction Unit, Kahlaische Straße 10, D07745 Jena, Germany; e-mail: [email protected] or [email protected]. Both authors gratefully thank Steffen Huck and Roland Kirstein for helpful comments, and gratefully acknowledge the support of the Deutsche Forschungsgemeinschaft.