Repeated-interaction gains let trust outweigh distrust despite occasional great losses

Evidence

Trust is often achieved simply by the continuity of the relation between parties and the recognition by each that what he might gain by cheating in a given instance is outweighed by the value of the tradition of trust that makes possible a long sequence of future agreement. By the same token, “trust” may be achieved for a single discontinuous instance, if it can be divided into a succession of increments. — Thomas C. Schelling, The Strategy of Conflict, 311

Categorization

• XREF: This is the folk-theorem/repeated-game logic that underlies Gambetta’s account of mafia reputation and Milgrom et al.’s private-judge law merchants — the same continuity logic keeps a Godfather-bond enforcer honest. — connects to: Individual-level rational-choice accounts of trust fail as general explanations; Trust requires time for repeated interactions and is a cognitive capacity; Trustworthiness persists only while future gains from the relationship outweigh defection (+13 more)
• corroborated: 2 independent passages support this claim — Thomas C. Schelling, The Strategy of Conflict, 311

Related

• Repeated interaction transforms the incentives of a one-way trust game (similarity 0.94)
• Infinite repetition sustains honest exchange without any binding commitment (similarity 0.91)
• Trust requires time for repeated interactions and is a cognitive capacity (similarity 0.90)
• Trustworthiness persists only while future gains from the relationship outweigh defection (similarity 0.90)
• Cost-driven market ties evolve into trust-laden partnerships over time (similarity 0.88)
• Trustworthiness begets trust via reputation and repeated dealings (similarity 0.88)
• Optimism about others’ trustworthiness is self-reinforcing through gained experience (similarity 0.88)
• Reciprocity motivations can be self-reinforcing where further interactions are plentiful (similarity 0.87)
• Individual-level rational-choice accounts of trust fail as general explanations (similarity 0.85)
• Future gains from continued interaction function as both incentive and sanction for trust. (similarity 0.84)
• Trust requires repeated encounters, memory, costly honesty, and earned reputation (similarity 0.82)
• Trust is encapsulated interest achievable through many incentive mechanisms (similarity 0.82)
• Recurrent encounters with hidden breaches make trust harder to violate (similarity 0.82)
• A continuing relationship functions as a forfeitable bond against cheating. (similarity 0.81)
• Trust emerges from gradually escalated reciprocal exchanges in ongoing relationships (similarity 0.81)

Broader Connections

• Future gains from continued interaction function as both incentive and sanction for trust. #corroborates (0.90)
• Mutual trust in iterated exchange is selffulfilling through aligned incentives #corroborates (0.85)
• Trustworthiness begets trust via reputation and repeated dealings #expands (0.82) — Russell Hardin, Trust and Trustworthiness, 793
• Reciprocal trust creates mutual incentives for trustworthiness #expands (0.80) — Nicolas Baumard, A mutualistic approach to morality, 166