We go to the restaurant and order our food. We trust the waiter that he heard our order and jotted it down correctly. We trust the chefs that they cook our food properly (after all, we can’t enter the kitchen because it’s “authorized personnel only”). Likewise, the crew and the owner of the restaurant trust us that we will pay them in exchange for the good service and good food. The thing is: we don’t know them, and they don’t know us. So why do we trust them even if they are strangers?
According to the rational actor model developed by economists, you should assume other people will take advantage of you if they can possibly get away with it. Furthermore, the model states that it’s in your best interest to take advantage of another’s trust anytime you can get away with it. That means you should only trust someone to the extent that you can compel them to follow through with their promise.
This model forms the motivation for contract law and the role of government in enforcing agreements. You and your roofer sign a contract before he replaces the shingles on your roof. If you refuse to pay when the work is done, he can take you to court. And if the roof leaks, you can sue for damages.
While we may sign contracts for major business transactions, in most everyday situations we rely on unsecured trust instead. We trust our barbers, plumbers, and dry cleaners to render the services we request, and they trust we’ll pay them when the job is done. Only in certain cases do we act according to the rational actor model. For example, in fast food restaurants we’re expected to pay first before we get our meal.
There are two explanations for this type of behavior. Check them out over at Psychology Today.
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