Anticipated opportunism blocks mutually beneficial transactions without trust

Evidence

So of course there will not be a transaction. The potential customer reasons backwards: ‘If I enter the showroom and make a purchase the salesman wil sell me a lemon and my pay-off will be —6, which is less than zero — my pay-off in not buying a car at all. So of course I should not enter the showroom’. And he will not. We have thus a unique equilibrium of the game where no transaction occurs and where each party enjoys a pay-off — of nil. This is worse for both than the (non-equilibrium) outcome where a reliable car is sold and where the customer and the salesman enjoy @ and a respectively. A mutually beneficial transaction is thus unrealized. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 896

Categorization

• XREF: This is exactly the Akerlof lemons-style outcome and maps to the Hospital/Reading cue theme where anticipated defection collapses cooperation.
• QUESTION: Does backward induction require the customer to know the salesman’s type with certainty? This foreshadows how introducing uncertainty changes the equilibrium.