Opportunism, Trust and Cooperation

Marie-Laure Cabon-Dhersin and Shyama V. Ramani
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Shyama V. Ramani: INRA-ESR, Paris, France , ramani@ivry.inra.fr

Rationality and Society, 2007, vol. 19, issue 2, 203-228

Abstract: Even when there is a potential danger of opportunism, economic agents often initiate contracts or engage in trust. Considering a world with two types of agents, opportunists and non-opportunists, interacting under incomplete information, this article develops a simple two-stage game theoretic model to show how trust and cooperation can emerge in a one-shot interaction, even in the absence of a supporting incentive mechanism. Two classic paradigms are considered: the prisoner's dilemma and the game of chicken. In the context of the prisoner's dilemma, trust depends on the exogenous probability of having a non-opportunist partner, while in the game of chicken trust is purely a function of the payoffs. Contrary to intuition, a high ratio of non-opportunistic agents in the population does not favor contract initiation in the game of chicken and a strong presence of opportunists does not act as an impediment to respecting commitments.

Keywords: non-cooperative games; incomplete information; trust; cooperation (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (9)

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Working Paper: Opportunism, Trust and Cooperation (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ratsoc:v:19:y:2007:i:2:p:203-228

DOI: 10.1177/1043463107077391

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