Jamal Awil

← Trust and Trustworthiness

Law reduces severe losses from cheating by smoothing gain-loss asymmetry. [causal]

A central value of contract and even criminal law is to reduce the likelihood of severe losses from cheating, such as the lieutenant colonel's loss of 4,500 rubles. Had he been in a contractual relation with Trifonov, he would not have been completely protected, but the asymmetry between his potential gains and losses would have been much less acute.

Russell Hardin, Trust and Trustworthiness, loc. 507