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Trust, Network Closure

Network Closure "The power of reputation rests on the idea of network closure, which is the degree to which everyone knows everyone else in a network. In a subgroup or "clique" where everybody knows everybody else, reputation can have currency much more powerful than money. Promises within the group can be trusted because the consequences of breaking a promise would be catastrophic. Anyone who mistreated a fellow member in such a group would quickly find himself ostracized by the entire group, his reputation ruined."