| dc.description.abstract | In this paper we consider the importance of trust, in the
context of economic institutions, and specifically with
respect to questions about market mechanisms and the
role of social interactions. We review recent advances in
institutional economics closely tied to developments in phi losophy of mind and cognitive science, involving extended
and enactive cognition. We argue that the analysis of differ ent conceptions of institutional mind extension, in Denzau
and North’s shared mental models, Clark’s extended mind,
and a more enactive approach that emphasizes the impor tance of social interaction and personal relationships, can
benefit from Kathrine Hawley’s distinction between reliability
and trust. Institutional arrangements based solely on the
reliability of impersonal mechanisms can lead to a variety of
social pathologies and, at the extreme, a form of cognitive
atrophy, all of which can undermine the sustainability of
institutions. Even if trust comes with risks and some degree
of unpredictability, it turns out to be a necessary glue-like
ingredient in the constitution of social institutions. | vi |
