ABSTRACT
This chapter explores the potential of this approach in application to trust-based social interactions. It reviews pertinent experimental evidence to the effect that cooperation in dilemmas of trust is due to conditional cooperators willing to establish and maintain mutually beneficial trust-reciprocity relations. The chapter discusses the influence of social norms on trust-reciprocity relations, in particular, their vital role in coordinating intentions and beliefs of conditional cooperators under the conditions of social uncertainty. It explains how this approach allows us to explicate many trust-reciprocity-based social exchanges as reasonable, which are prima facie problematic from the parsimonious perspective of the homo economicus model. Models of social preferences typically assume that social preferences such as altruism or inequality aversion are relatively robust traits of people, distinguishing them from selfish types. In addition, partner choice can further enhance their chances of reaping mutual benefits from social exchanges, allowing cooperators to interact with similar types, based on reputations and signals of various kinds.
