A fundamental question in social sciences is how trust emerges. We provide an answer which relies on the formation of social and economic relationships. We argue that behind trust lies the fact that individuals invest in connections taking into account the potential externalities networks...

We report the results of experiments designed to test the effect of social status on contributions to a public good, with and without punishment. The experiments are conducted in four-person groups in a “star” network, where one central player observes and is observed by the others. This...