One-shot trust depends on the trustee’s statistical expectations about borrower types

Evidence

Now consider the one-shot character of Barth’s relationship with his rug dealer. In particular, consider the case from the perspective of the one who seemingly trusts us. For the rug dealer in the bazaar, the difficulty of selling to customers unable to pay on the spot might be commonplace. If experience shows that those customers are reasonably reliable, then the rug dealer might profit substantially from increasing total sales by taking the risk of letting people send the money later. Barth’s rug merchant might have had some sense from experience or guessing, rightly or wrongly, that some types of people (those who struggle to speak the local language, women, men, the well-dressed, the friendly, those who seem to be knowledgeable about rugs or who praise the workmanship and artistry) will often enough send the money to make it worth the risk of parting with rugs on expectations—perhaps with less willingness to bargain down to the lowest price to cover for the sometime person who does not send the payment. — Russell Hardin, Trust and Trustworthiness, 393

Categorization

• XREF: The trustor’s reliance on type-signaling and aggregate reliability echoes Milgrom’s account of how reputation substitutes for direct credit checks.