Trust can be one-way and riskless for one party while costly for the other

Evidence

What is the role of trust in this interaction? Let us first consider its one-way character. Barth took no risk in walking away with his rug and his likely unenforceable debt; only the rug dealer faced a risk of loss. As a one-way relationship, Barth’s interaction with the rug merchant is similar to the dealings of Karamazov’s lieutenant colonel and Trifonov. Trifonov was not at risk—at least not from the lieutenant colonel’s possibility of cheating him the way Trifonov could and did cheat the lieutenant colonel. (They were both at some legal risk if they were found out.) The distinctive difference in the two cases is that Barth’s interaction was once only while that of Trifonov and the lieutenant colonel was iterated over many exchanges. — Russell Hardin, Trust and Trustworthiness, 392

Categorization

• XREF: Connects directly to Milgrom’s law-merchant analysis and the one-shot vs. repeated-game distinction central to reputation-based trade institutions.