6: Trust

The dilemmas posed by game theory are perplexing because they deal with matters of trust. If a person feels that the other party will do the right thing, choose the option that achieves the greatest benefit to both parties, then the decision is straightforward. What gives the subject of a logic puzzle such pause is their uncertainty, and their suspicion that the other party will cheat or attempt to gain an advantage without regard for the welfare of others.

The author cites a social experiment in which subjects avoided a person who was overtly attempting to do them a favor. His conclusion is that people are wary of strangers, and expect that an overt act of kindness is a subterfuge for covert motives: why would someone do something nice for me unless they expected to gain something for themselves?

At the same time, trust is the basis for social existence. To do business with other people, and even to live in proximity to others, implies a trust that they will not seek to harm us .. at least, most people won't, most of the time.

The Origins of Trust

The author examines some of the psychological and physiological bases of trust:

The Evolution of Trust

In effect, trust in other people is like a high-risk investment. A highly risk-averse person will seek to minimize their exposure to loss, even if it means foregoing the potential to gain, hence will be distrustful of others. A trusting person is less risk-averse, and is more willing to accept the possibility of loss if it means the opportunity to gain.

Game theorists call this a "payoff-dominant" strategy, in which the player's focus is on the potential for gain and they seek the greatest payoff.

From one perspective, risk-aversion is deemed to be the more successful strategy. The animal that takes immediate advantage of a mediocre opportunity has a better chance to survive than one than another animal that passes it up, believing a better opportunity will present itself later. But from another, the willingness to take risks, particularly in trusting others, has also been a successful strategy. Social animals, which trust in others of their species enough to live in communal groups, tend to prosper better than solitary creatures.

Returning to human society, it's clear that trust cannot be unconditional - there are parasitic individuals who will feign commitment in order to take advantage of others, and some who make a living by scamming. The practice is so prevalent that virtually everyone has been taken advantage of and, as a result, is wary of others.

Credible Commitment

In order to gain trust, or at least the willingness to act in the absence of trust, one party can demonstrate credible commitment to the other - in effect, demonstrating logical reasons that you can be expected to act in accordance with your agreement.

One technique is to agree to terms that would penalize your for failing to deliver. This might include making a public disclosure of your agreement (so your reputation is damaged if your renege); break the big commitment into a series of smaller phases with incremental consideration; enter into a formal contract with penalty clauses

Another technique is to burn your ships - that is, to demonstrate that you have eliminated the alternatives that might cause you to neglect your commitment to a given party. (EN: a few examples are given, but they seem a bit odd and oblique to me. A better one might be taking your resume offline from job-hunting sites upon accepting a new job, or closing down your profile on a dating site when entering a relationship.)

Generosity and Altruism

Another method used to gain the confidence of others is making an overt demonstration of altruism and generosity without the expectation of a reward. This sets the expectation that all of your actions are likewise motivated by a desire to benefit others.

It's noted that people are motivated toward acts of charity by three factors:

  1. Biological - It has been found that the act of granting a benefit to others stimulates the production of oxytocin, serotonin, and other pleasure-inducing hormones
  2. Psychological - The act of altruism gives the donor a sense of self-esteem and superiority to his benefactor
  3. Sociological - When others withness an act of altruism, they grant esteem to the donor: a person who can afford to give is reasoned to be a person of power and wealth.

(EN: The author does not draw a distinction between altruism and generosity. The notion of altruism is based on sacrifice - the donor is damaging himself by granting resources that could have been used to serve his own needs. Generosity, meanwhile, is merely disposing of surplus, the lack of which is of no consequence to the donor.)

The Trust Bond

Trust is based on openness and free exchange of information - in effect, having the ability to verify a claim made by another person decreases the likelihood that another party will seek to actually verify it - the theory being that a person is less likely to be dishonest if it is easy to uncover their deceit.

This is evident in communal societies (such as Japan), where villagers live in such proximity that everyone knows everything about everyone else, as well as in specific situations where the same is true (sailors on the same ship). The more people are known and knowable to one another, the more trust exists in a community.

However, there is also the notion of social fragmentation - that trust exists within members of the same group, but in a large enough society, people tend to form cliques and smaller communities of trust that create distrust for non-members, even though they are part of the same community. Chauvinism, jingoism, and racism are expressions of social divisiveness.

Of interest: research has been done (Putnam) that indicates social divisiveness does not enhance the level of trust within the members of a group. In comparing diverse societies to more homogeneous ones, it was found that people in diverse societies not only mistrust individuals outside their group, but have less trust even for members.

This is not necessarily so: the author cites anecdotal evidence from Bosnia, in which there were varying levels of trust among communities. In villages where individuals identified with their ethnic group (Serb, Croat, or Muslim), there was a diminished level of trust among all citizens. In villages where the ethnic groups were less pronounced, people consider all groups to be members of the same community, and trust levels were considerably higher among villagers.

Some, including influential thinkers, have reasoned that the only way to avoid ethnic and civil strife would be to form a one-world government that erased the barriers of nations and states. Not only is this impractical, but it is bootless. Experiments in game theory have found that groups of individuals who are homogeneous (race, age, gender, economic level, education, etc.) will form factions - and as such, it cannot be presumed that "classifications" of people are entirely external. If no-one tells people that they belong to different groups, they will form factions of their own accord.


Another strategy for overcoming trust is the establishment of rituals. There is some speculation on the origin of ritual - as rituals exist in every human culture - but there doesn't seem to be a common answer. Some rituals have very specific and practical purposes, others seem to be purely symbolic.

From a practical perspective, a ritual establishes patterns of behavior common to a culture - such that a person who acts in a given way is expected to be following a ritual, and their future actions will follow them as well. The fact that both individuals know the ritual overcomes their unfamiliarity with one another as people.

For example, shaking hands at the end of a negotiation implies acceptance of the terms - it would violate the ritual if a person sought to change their position after having made that gesture. In some cultures, this would cause the negotiations to break down immediately - in others, either party could seek a judicial remedy, as the handshake is recognized as legally binding.

Offering Trust

One of the more effective methods of gaining another person's trust is to offer them yours - the author refers to this as "initiating the cycle of trust," based on the tendency of people to reciprocate.

Various experiments and "trust games" generally prove this out: a person who puts their trust in someone else generally finds (and is surprised to find) that the other party will not take advantage of them.

The author uses group therapy as an example: individuals may be reluctant to trust others with embarrassing details about a medical or psychological problem - but once one patient open up (in effect, trusting the group with their information), the others are more at ease.

The author mentions an experiment done in various cities, where a cell phone was left in a public place and the "owner" would call the number to see if the party who found it would answer and return the phone to them. Globally, the return rate was near 66% - though there were some surprising differences among locations. In Slovenia (a relatively poor country), the return rate was 97%; in New York, 92%; in Singapore, 48%; and in Hong King, only 39%. (EN This seems to have more to do with honesty and respect for property than trust, but it's an interesting observation nonetheless.)

A contrary example is offered as well, of a "community bicycle" program in an English town in which 300 bicycles were provided for people to use and then leave for others to use. This failed miserably, as every single bicycle was stolen on the very first day. People in the community chose to believe it was the work of "professional bicycle thieves."