Rational backward induction alone can void all mutually beneficial exchange.

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 (#responds-to, via linked claim)

Even discounting these, I would still argue that — with respect to the time span of reasonable relevance to any given generation — the spontaneous evolution of a cooperative equilibrium among humans is only just as likely as that of a noncooperative one, unless some restriction is imposed on agents’ beliefs. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2804 (#expands, via linked claim)

Categorization

• XREF: connects to: Every exchange is individually advantageous given its actual circumstances — Georg Simmel, on individuality and social forms_…, 255; Initial cooperation can wreck backward induction and build rational trust — Russell Hardin, Trust and Trustworthiness, 606; Infinite repetition sustains honest exchange without any binding commitment (+3 more)

Related

• Initial cooperation can wreck backward induction and build rational trust (similarity 0.88)
• Opening with cooperation is rational self-interest, not mere morality (similarity 0.83)
• Initial cooperation can rationally break the backward induction argument. (similarity 0.83)
• Cooperative equilibria are no likelier than noncooperative ones without belief restrictions (similarity 0.82)
• Cooperative relationships require asymmetric giving at their outset (similarity 0.81)
• Frequent repeated interaction makes cooperative trade equilibria feasible, whereas infrequent trade does not. (similarity 0.81)
• Infinite repetition sustains honest exchange without any binding commitment (similarity 0.80)
• Reciprocity motivations can be self-reinforcing where further interactions are plentiful (similarity 0.80)
• Building stable relations generates the incentives that produce trust (similarity 0.80)
• Initial cooperation despite backward induction is what sustains living societies. (similarity 0.80)
• Trust relationships self-maintain once the parties recognize mutual benefit (similarity 0.79)
• Trust is a result rather than a precondition of cooperation (similarity 0.79)
• Trust is encapsulated interest achievable through many incentive mechanisms (similarity 0.78)
• Cost-driven market ties evolve into trust-laden partnerships over time (similarity 0.78)
• Cooperation can occur without trust when incentives align (similarity 0.78)

Broader Connections

• Initial cooperation can wreck backward induction and build rational trust #responds-to (0.80) — Russell Hardin, Trust and Trustworthiness, 606
• Cooperative equilibria are no likelier than noncooperative ones without belief restrictions #expands (0.78) — Diego Gambetta, Trust - Making and Breaking Cooperative…, 2804
• Every exchange is individually advantageous given its actual circumstances #complicates (0.75) — Georg Simmel, on individuality and social forms_…, 255
• Infinite repetition sustains honest exchange without any binding commitment #responds-to (0.75)
• Narrow self-interest does not automatically produce efficient exchange #complicates (0.72)
• A utilitarian commitment to overall welfare generally implies trustworthiness in mutual exchanges #contradicts (0.72)