Reputation for honesty is built through costly investment against short-term interests

Evidence

I think this is the right sort of framework to capture the idea that people invest resources for the purpose of building a reputation for honesty. The gains from honest behaviour are built directly into the model. The fact that the dishonest salesman builds his reputation by going against his short-term interests is an important feature to highlight. This is his investment. — Diego Gambetta, Trust - Making and Breaking Cooperative…, 1005

Categorization

• XREF: Connects directly to Hardin’s claim that trust depends on observable constraints — reputational investment is precisely the observable signal a sighted observer (the doctor’s wife) can read, versus the opaque blind world where no such signals survive.