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mk  ·  4873 days ago  ·  link  ·    ·  parent  ·  post: Welcome, stranger
The mathematical model seems flawed, though. It assumes that an act of selfishness automatically means one won't be trusted in the future, which isn't the case in the real world. It might mean that some person(s) won't trust you, but it doesn't mean everyone won't.

I agree with that. However, I think it also matters whether or not you are observed cheating by others, as it might change their behavior. If I cheat, it won't only decrease the chance of someone trusting me, but it might also encourage others to cheat because they observe that they are in a cheating environment. That would also make life more difficult for me.

Mistrust spreads, and can lead to inefficiencies.

We need better ways so we can formulate this, and meaningfully discuss these phenomenon. It seems absurd to me that some think that our economics are best served by selfish actions, and yet we don't practice such behavior in everyday life. We could probably have more efficient markets if we could achieve a better balance between economic-related laws and actual human behavior.