One-shot trade games yield cheating as the unique equilibrium.

Evidence

It is clear that if this game is played only once, it is in each player’s separate interest to play Cheat, since that play maximizes the player’s individual utility regardless of the play chosen by the competitor. Consequently, the only Nush equilibrium of the game is for both to play Cheat. Then both are worse off than if they could somehow agree to play Honest. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 46

Categorization

• XREF: Directly instantiates the classic prisoner’s dilemma / Nash equilibrium framing that underpins Gambetta’s private protection markets model and Milgrom et al.’s private judges analysis — a game-theory baseline the reader’s project starts from. — connects to: Growing trade communities face monitoring and one-shot-cheating problems that demand new institutions. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 26; Cheating tempts traders while cooperation yields shared gains. — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 42; Repeated interaction transforms the incentives of a one-way trust game (+9 more)

Broader Connections

• One-shot strategic games can lock rational players into collectively worse outcomes. #exemplifies (0.90)
• Cheating tempts traders while cooperation yields shared gains. #expands (0.85) — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 42
• Repeated trade with a high discount factor enables cooperative equilibria. #qualifies (0.85) — PAUL R. MILGRO, PAUL R. MILGRO - THE ROLE OF…, 47
• Repeated interaction transforms the incentives of a one-way trust game #expands (0.80)
• A continuing relationship functions as a bond deterring dishonest trading #qualifies (0.80)
• Cooperation can occur without trust when incentives align #expands (0.80)
• Sudden escalation of stakes can transform iterated trust into one-shot opportunism #expands (0.75)
• Trade institutions must solve both an information and a punishment-motivation problem #expands (0.75)
• Law substitutes for trust where trustworthiness fails against endgame incentives #qualifies (0.75)