IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-02088730.html
   My bibliography  Save this paper

Opportunism, Trust and Cooperation

Author

Listed:
  • Marie-Laure Cabon-Dhersin

    (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Shyama V. Ramani

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

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.

Suggested Citation

  • Marie-Laure Cabon-Dhersin & Shyama V. Ramani, 2016. "Opportunism, Trust and Cooperation," Post-Print hal-02088730, HAL.
    • Handle: RePEc:hal:journl:hal-02088730
    DOI: 10.1177/1043463107077391
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    References listed on IDEAS

    as
    1. d'Aspremont, Claude & Jacquemin, Alexis, 1988. "Cooperative and Noncooperative R&D in Duopoly with Spillovers," American Economic Review, American Economic Association, vol. 78(5), pages 1133-1137, December.
    2. Kreps, David M. & Milgrom, Paul & Roberts, John & Wilson, Robert, 1982. "Rational cooperation in the finitely repeated prisoners' dilemma," Journal of Economic Theory, Elsevier, vol. 27(2), pages 245-252, August.
    3. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 38(1), pages 1-12.
    4. Wit, Arjaan P. & Wilke, Henk A. M., 1992. "The effect of social categorization on cooperation in three types of social dilemmas," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 135-151, March.
    5. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-894, Supplemen.
    6. Parikshit Ghosh & Debraj Ray, 1996. "Cooperation in Community Interaction Without Information Flows," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 63(3), pages 491-519.
    7. Spagnolo, Giancarlo, 1999. "Social relations and cooperation in organizations," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 1-25, January.
    8. Williamson, Oliver E, 1993. "Calculativeness, Trust, and Economic Organization," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 453-486, April.
    9. Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, University Library of Munich, Germany.
    10. Axel Ockenfels & Gary E. Bolton, 2000. "ERC: A Theory of Equity, Reciprocity, and Competition," American Economic Review, American Economic Association, vol. 90(1), pages 166-193, March.
    11. Kreps, David M. & Wilson, Robert, 1982. "Reputation and imperfect information," Journal of Economic Theory, Elsevier, vol. 27(2), pages 253-279, August.
    12. Guth, Werner & Ockenfels, Peter & Wendel, Markus, 1997. "Cooperation based on trust. An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 18(1), pages 15-43, February.
    13. James Jr., Harvey S., 2002. "The trust paradox: a survey of economic inquiries into the nature of trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 47(3), pages 291-307, March.
    14. Jacob K. Goeree & Charles A. Holt, 2001. "Ten Little Treasures of Game Theory and Ten Intuitive Contradictions," American Economic Review, American Economic Association, vol. 91(5), pages 1402-1422, December.
    15. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    16. Carraro, Carlo & Siniscalco, Domenico, 1993. "Strategies for the international protection of the environment," Journal of Public Economics, Elsevier, vol. 52(3), pages 309-328, October.
    17. Fisman, Raymond & Khanna, Tarun, 1999. "Is trust a historical residue? Information flows and trust levels," Journal of Economic Behavior & Organization, Elsevier, vol. 38(1), pages 79-92, January.
    18. John H Dunning, 1995. "Reappraising the Eclectic Paradigm in an Age of Alliance Capitalism," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 26(3), pages 461-491, September.
    19. Sako, Mari & Helper, Susan, 1998. "Determinants of trust in supplier relations: Evidence from the automotive industry in Japan and the United States," Journal of Economic Behavior & Organization, Elsevier, vol. 34(3), pages 387-417, March.
    20. Craswell, Richard, 1993. "On the Uses of "Trust": Comment [Calculativeness, Trust, and Economic Organization]," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 487-500, April.
    21. Casson, Mark, 1991. "The Economics of Business Culture: Game Theory, Transaction Costs, and Economic Performance," OUP Catalogue, Oxford University Press, number 9780198283751.
    22. Marie-Laure Cabon-Dhersin & Shyama V. Ramani, 2004. "Does trust matter for R&D cooperation? A game theoretic examination," Post-Print hal-02088766, HAL.
    23. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    24. Michihiro Kandori, 1992. "Social Norms and Community Enforcement," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 63-80.
    25. Bohnet, Iris & Croson, Rachel, 2004. "Trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 55(4), pages 443-445, December.
    26. Berg Joyce & Dickhaut John & McCabe Kevin, 1995. "Trust, Reciprocity, and Social History," Games and Economic Behavior, Elsevier, vol. 10(1), pages 122-142, July.
    27. Watson, Joel, 1999. "Starting Small and Renegotiation," Journal of Economic Theory, Elsevier, vol. 85(1), pages 52-90, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chiara Conti & Marco A. Marini, 2019. "Are you the right partner? R&D agreement as a screening device," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(3), pages 243-264, April.
    2. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2013. "Cooperation: The Power Of A Single Word? Some Experimental Evidence On Wording And Gender Effects In A Game Of Chicken," Bulletin of Economic Research, Wiley Blackwell, vol. 65(1), pages 43-64, January.
    3. Chiara CONTI, 2013. "Asymmetric information in a duopoly with spillovers: new findings on the effects of RJVs," Departmental Working Papers 2013-04, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    4. Olivia Macovei, 2020. "Conceptual Delimitations related to the Philosophical Approaches on Synthetic Biology," Logos Universalitate Mentalitate Educatie Noutate - Sectiunea Filosofie si Stiinte umaniste/ Logos Universality Mentality Education Novelty - Section: Philosophy and Humanistic Sciences, Editura Lumen, Department of Economics, vol. 8(2), pages 83-104, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2012. "The puzzle of cooperation in a game of chicken: an experimental study," Theory and Decision, Springer, vol. 72(1), pages 65-87, January.
    2. Marie-Laure Cabon-Dhersin & Shyama Ramani, 2005. "Does trust matter for R&D cooperation? A game theoretic examination," Theory and Decision, Springer, vol. 57(2), pages 143-180, March.
    3. Colombo, Ferdinando & Merzoni, Guido, 2006. "In praise of rigidity: The bright side of long-term contracts in repeated trust games," Journal of Economic Behavior & Organization, Elsevier, vol. 59(3), pages 349-373, March.
    4. Andreoni, James & Samuelson, Larry, 2006. "Building rational cooperation," Journal of Economic Theory, Elsevier, vol. 127(1), pages 117-154, March.
    5. Marie-Laure Cabon-Dhersin & Nathalie Etchart-Vincent, 2008. "Cooperation in a Game of Chicken with Heterogeneous Agents: An Experimental Study," CIRED Working Papers hal-00395939, HAL.
    6. James Jr., Harvey S., 2002. "The trust paradox: a survey of economic inquiries into the nature of trust and trustworthiness," Journal of Economic Behavior & Organization, Elsevier, vol. 47(3), pages 291-307, March.
    7. Huck, Steffen & Lünser, Gabriele K. & Tyran, Jean-Robert, 2012. "Competition fosters trust," Games and Economic Behavior, Elsevier, vol. 76(1), pages 195-209.
    8. Bönte, Werner, 2008. "Inter-firm trust in buyer-supplier relations: Are knowledge spillovers and geographical proximity relevant?," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 855-870, September.
    9. Greiner, Ben & Vittoria Levati, M., 2005. "Indirect reciprocity in cyclical networks: An experimental study," Journal of Economic Psychology, Elsevier, vol. 26(5), pages 711-731, October.
    10. Kartal, Melis & Müller, Wieland & Tremewan, James, 2021. "Building trust: The costs and benefits of gradualism," Games and Economic Behavior, Elsevier, vol. 130(C), pages 258-275.
    11. Guido Merzoni & Federico Trombetta, 2012. "Foundations of trust, interpersonal relationships and communities," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 120(3), pages 295-312.
    12. Kanagaretnam, Kiridaran & Mestelman, Stuart & Nainar, Khalid & Shehata, Mohamed, 2009. "The impact of social value orientation and risk attitudes on trust and reciprocity," Journal of Economic Psychology, Elsevier, vol. 30(3), pages 368-380, June.
    13. Güth, Werner & Mugera, Harriet & Musau, Andrew & Ploner, Matteo, 2014. "Deterministic versus probabilistic consequences of trust and trustworthiness: An experimental investigation," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 28-40.
    14. Ola Kvaløy & Miguel Luzuriaga & Trond E. Olsen, 2017. "A trust game in loss domain," Experimental Economics, Springer;Economic Science Association, vol. 20(4), pages 860-877, December.
    15. Harvey James, 2002. "The Trust Paradox: A Survey of Economic Inquiries Into the Nature of Trust and Trustworthiness," Microeconomics 0202001, University Library of Munich, Germany.
    16. Vincenzo Scoppa, 2003. "Contratti incompleti ed enforcement endogeno. Una rassegna della letteratura," Economia politica, Società editrice il Mulino, issue 3, pages 391-440.
    17. Pfeuffer, Wolfgang, 2006. "Religion as a Seed Crystal for Altruistic Cooperation," Munich Dissertations in Economics 5788, University of Munich, Department of Economics.
    18. Matteo Ploner, 2007. "Personal Autonomy in Trust-Based Interactions. An Experimental Analysis," CEEL Working Papers 0701, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    19. Christian Lukas & Jens Robert Schöndube, 2008. "Trust and Adaptive Learning in Implicit Contracts," FEMM Working Papers 08017, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.
    20. Maroš Servátka & Steven Tucker & Radovan Vadovič, 2011. "Building Trust—One Gift at a Time," Games, MDPI, vol. 2(4), pages 1-22, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-02088730. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.