kaal:claim:3782210-002

Markets collapse when opportunistic behavior saps the efficiency of cooperation: once the environment becomes too adversarial and trust is diminished, collaboration is no longer profitable.

when the efficiency of cooperation is sapped by opportunistic behavior. When the environment becomes too adversarial, when trust is diminished, collaboration is no longer profitable. The market collapses.

Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021), Chapter. Reputation, p. 2
https://ssrn.com/abstract=3782210 · source PDF

Craig Calcaterra, Wulf A. Kaal, The Importance of Reputation for the Evolution of Decentralization (2021). SSRN: https://ssrn.com/abstract=3782210

• markets with significant information asymmetries
• environments permitting a wide variety of strategies

failuresupport: arguedfailure: Adversarial market collapsefamily: collective-action-and-coordination-failureeconomicsreputationdisclosure

• extends kaal:claim:3373393-007 Agency problems originate from the lack of trust between principals and agents, which itself stems from inform...

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• Extension: Robust Reputation in Decentralized Markets