Expectations of Fairness and Trust Co-Evolve in Environments of Partial Information

Paul Rauwolf, Joanna J. Bryson

Research output: Contribution to journalArticle

Abstract

When playing one-shot economic games, individuals often blindly trust others, accepting partnerships without any information regarding the trustworthiness of their partner. Consequently, they risk deleterious pacts. Oddly, when individuals do have information about another, they reject partnerships that are not fair, despite the fact that such offers are profitable—individuals costly punish. Why would one reject profitable partnerships on the one hand, but risk unknown offers on the other? Significant research has gone into explaining the contexts where blind trust or costly punishment provides an evolutionary advantage; however, both behaviours are rarely considered in tandem. Here we demonstrate that both behaviours can simultaneously be revenue maximizing. Further, given the plausible condition of partially obscured information and partner choice, trust mediates the generation of costly punishment. This result is important because it demonstrates that the evolutionary viability of trust, fairness, and costly punishment may be linked. The adaptive nature of fairness expectations can best be explained in concert with trust.

LanguageEnglish
Pages891-917
Number of pages27
JournalDynamic Games and Applications
Volume8
Issue number4
Early online date25 Sep 2017
DOIs
StatusPublished - 1 Dec 2018

Fingerprint

Partial Information
Fairness
Economics
Trustworthiness
Viability
Demonstrate
Game
Unknown
Partnership

Keywords

  • Costly punishment
  • Fairness
  • Negative pseudo-reciprocity
  • Partial information
  • Trust
  • Trust game

ASJC Scopus subject areas

  • Statistics and Probability
  • Computer Science Applications
  • Computer Graphics and Computer-Aided Design
  • Computational Theory and Mathematics
  • Computational Mathematics
  • Applied Mathematics

Cite this

Expectations of Fairness and Trust Co-Evolve in Environments of Partial Information. / Rauwolf, Paul; Bryson, Joanna J.

In: Dynamic Games and Applications, Vol. 8, No. 4, 01.12.2018, p. 891-917.

Research output: Contribution to journalArticle

@article{7fae7dd7712f49aa99db11bb7ecb5df5,
title = "Expectations of Fairness and Trust Co-Evolve in Environments of Partial Information",
abstract = "When playing one-shot economic games, individuals often blindly trust others, accepting partnerships without any information regarding the trustworthiness of their partner. Consequently, they risk deleterious pacts. Oddly, when individuals do have information about another, they reject partnerships that are not fair, despite the fact that such offers are profitable—individuals costly punish. Why would one reject profitable partnerships on the one hand, but risk unknown offers on the other? Significant research has gone into explaining the contexts where blind trust or costly punishment provides an evolutionary advantage; however, both behaviours are rarely considered in tandem. Here we demonstrate that both behaviours can simultaneously be revenue maximizing. Further, given the plausible condition of partially obscured information and partner choice, trust mediates the generation of costly punishment. This result is important because it demonstrates that the evolutionary viability of trust, fairness, and costly punishment may be linked. The adaptive nature of fairness expectations can best be explained in concert with trust.",
keywords = "Costly punishment, Fairness, Negative pseudo-reciprocity, Partial information, Trust, Trust game",
author = "Paul Rauwolf and Bryson, {Joanna J.}",
year = "2018",
month = "12",
day = "1",
doi = "10.1007/s13235-017-0230-x",
language = "English",
volume = "8",
pages = "891--917",
journal = "Dynamic Games and Applications",
issn = "2153-0785",
publisher = "Springer Verlag",
number = "4",

}

TY - JOUR

T1 - Expectations of Fairness and Trust Co-Evolve in Environments of Partial Information

AU - Rauwolf, Paul

AU - Bryson, Joanna J.

PY - 2018/12/1

Y1 - 2018/12/1

N2 - When playing one-shot economic games, individuals often blindly trust others, accepting partnerships without any information regarding the trustworthiness of their partner. Consequently, they risk deleterious pacts. Oddly, when individuals do have information about another, they reject partnerships that are not fair, despite the fact that such offers are profitable—individuals costly punish. Why would one reject profitable partnerships on the one hand, but risk unknown offers on the other? Significant research has gone into explaining the contexts where blind trust or costly punishment provides an evolutionary advantage; however, both behaviours are rarely considered in tandem. Here we demonstrate that both behaviours can simultaneously be revenue maximizing. Further, given the plausible condition of partially obscured information and partner choice, trust mediates the generation of costly punishment. This result is important because it demonstrates that the evolutionary viability of trust, fairness, and costly punishment may be linked. The adaptive nature of fairness expectations can best be explained in concert with trust.

AB - When playing one-shot economic games, individuals often blindly trust others, accepting partnerships without any information regarding the trustworthiness of their partner. Consequently, they risk deleterious pacts. Oddly, when individuals do have information about another, they reject partnerships that are not fair, despite the fact that such offers are profitable—individuals costly punish. Why would one reject profitable partnerships on the one hand, but risk unknown offers on the other? Significant research has gone into explaining the contexts where blind trust or costly punishment provides an evolutionary advantage; however, both behaviours are rarely considered in tandem. Here we demonstrate that both behaviours can simultaneously be revenue maximizing. Further, given the plausible condition of partially obscured information and partner choice, trust mediates the generation of costly punishment. This result is important because it demonstrates that the evolutionary viability of trust, fairness, and costly punishment may be linked. The adaptive nature of fairness expectations can best be explained in concert with trust.

KW - Costly punishment

KW - Fairness

KW - Negative pseudo-reciprocity

KW - Partial information

KW - Trust

KW - Trust game

UR - http://www.scopus.com/inward/record.url?scp=85054820001&partnerID=8YFLogxK

U2 - 10.1007/s13235-017-0230-x

DO - 10.1007/s13235-017-0230-x

M3 - Article

VL - 8

SP - 891

EP - 917

JO - Dynamic Games and Applications

T2 - Dynamic Games and Applications

JF - Dynamic Games and Applications

SN - 2153-0785

IS - 4

ER -