Essays on social capital and coordination

My dissertation explores social capital and coordinated investment using experimental methods. Chapter 1 is motivated by the observed relationship between trust attitudes and economic growth (Knack and Keefer, 1997; La Porta et al., 1997; Algan and Cahuc, 2010). I hypothesize that trust as measured in standard survey questions may be capturing the ability of people to coordinate in situations where they both stand to gain if they overcome the risk that the other will not follow suit. This result may help explain (by providing a potential mechanism) the relationship between these survey measures of trust and macroeconomic performance. Chapter 2 examines the importance that expectations of behavior are commonly understood in a coordinated investment setting. That is, how does knowing what others think about what I will do affect what I think about them, and how should I respond to these second order beliefs? Chapter 3 is a field study in collaboration with Professor Randall Walsh. We explore the causal impact of trust on investment. We study how quasi-experimental shifts in trust attitudes caused by proximity to crime affect survey respondents' trust attitudes and investment behavior in incentivized tasks.