Much of our ability to trust others on ordinary matters of modest scope depends on having institutions in place that block especially destructive implications of untrustworthiness. Indeed, this is, in different vocabulary, Hobbes' argument for government and submission to it (Hobbes 1968 , 2.30: 376–94). If the potential losses of interacting with others are always high, our interactions are like prisoner's dilemmas in which the loss payoff for one who cooperates while the other defects is very large, so that the prospective loss trumps the gains even of several successful cooperations in repeated play. In such games, we may not ever be able to initiate joint cooperation and may therefore never enter into repeated play.

XREF: Extends the Hobbesian social contract logic into a game-theoretic framing; connects to trust literature and institutional economics. QUESTION: Whether this framework actually explains how real trust gets built versus merely constrains betrayal.

Russell Hardin, Trust and Trustworthiness, loc. 511