This study examines the role of trust in Genoese merchant enterprises in the sixteenth century. While great merchants and international financiers could rely on the state and its bank, smaller traders were left to their own devices. With no durable centralized state institutions to regulate and bolster long-distance trade, Genoese merchants relied on informal networks consisting of a combination of close associates and transient partners. Relationships between traders were enforced by means of a variety of weak mechanisms, none of which were able to prevent cheating by partners; but together they were able to provide just enough assurance when a merchant’s agent “trusted well.” In contrast to traders in more well studied Venice and Florence, Genoese traders used shared property rights to foster trust and to build complex activities even in an environment where neither punishment nor the threat of punishment could provide an efficient barrier to opportunistic behavior.
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