Opportunism, Trust and Cooperation

Marie-Laure Cabon-Dhersin and Shyama Ramani
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Shyama Ramani: X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris

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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: TRUST; NON COOPERATIVE GAMES; INCOMPLETE INFORMATION; COOPERATION (search for similar items in EconPapers)
Date: 2016-08-15
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Published in Rationality and Society, 2016, 19 (2), pp.203-228. ⟨10.1177/1043463107077391⟩

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Journal Article: Opportunism, Trust and Cooperation (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02088730

DOI: 10.1177/1043463107077391

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