Like the physical, human and technological forms of capital, social capital can significantly impact welfare. Social capital is important because the social structure affects the coordination and cooperation of economic activity. The model considers agents who maximise their lifetime gains to trade. Each trade between two members of a community has the structure of the prisoners' dilemma. Trades are repeated indefinitely, but not necessarily each period.
Social capital is defined as the social structure which yields cooperative trade as an equilibrium.
In particular, social capital relates to the frequency that any two agents meet. You are visitor number , says WebCounter . Go back to Joachim von Amsberg - WWW Home. Go to Bryan R.Routledge Home Page .