Economists model markets as anonymous one-shot exchanges with no role for trust.
Evidence
Economists as a rule have attached little importance to the role of such social ties as trust and friendliness in market exchange. As Albert Hirschman (1982) has observed, this can be explained by the fact that the ideal market upon which claims of allocative efficiency rest involves large numbers of price-taking anonymous buyers and sellers supplied with perfect information. With such markets there is no room for bargaining, negotiation, or mutual adjustment, and the operators that contract together need not enter into a recurrent or continuing relationship. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2470
Categorization
Category: Definitional Content
- XREF: Connects directly to the reader’s Luhmann/Hardin synthesis: the neoclassical ideal market is precisely the familiarity-free, observation-free abstraction that both theories critique.
- DEFINE: Defines the economist’s ideal market in terms of anonymity and perfect information—the baseline Luhmann’s ‘familiarity’ disrupts.