Initial cooperation can wreck backward induction and build rational trust

Evidence

Would it make sense for an individual to go through life without taking initial risks with new acquaintances? One might be always distrusting until reputational or other evidence led to trust in a particular case, and no doubt some people are initially distrustful to such a degree. For many people, such a stance would be too tedious and would cost far more in lost opportunities than it would save in avoided harms. To act according to the backward induction argument against cooperation in the iterated prisoner’s dilemma would not generally be in their interest (see discussion of the iterated prisoner’s dilemma in chapter 1). Once you have a cluster of associates on whom you can rely, however, it might not seem worth the risk of developing new relationships. At its extreme, this might mean a society of close-knit families closed off to most of the rest of the world, as in the impoverished subsistence economies discussed in chapter 4. — Russell Hardin, Trust and Trustworthiness, 606

Categorization

• XREF: Connects to the iterated prisoner’s dilemma framework from Milgrom’s law-merchant material and the trust-as-observable-constraints reading central to this integration. — connects to: Cooperation can occur without trust when incentives align; Rational trust requires both trusted’s incentives and truster’s knowledge; Trust is a result rather than a precondition of cooperation — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2781 (+9 more)
• corroborated: 2 independent passages support this claim — Russell Hardin, Trust and Trustworthiness, 606

Broader Connections

• Trust is a result rather than a precondition of cooperation #expands (0.85) — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2781
• Forced interdependence can generate trust almost instantly #expands (0.75)