Communities And Cooperation Essay

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Cooperation forms the basis of living. And trust underlies cooperation. Social formations such as communities and markets are in turn based on cooperation. Whichever part of the world we live in, be it a poor country in Africa or the superpower U.S.A. our daily needs and actions are fulfilled and determined within the framework of cooperating agencies which trust each other to sustain cooperation. Chapter 2 Trust Everyday to live and to fulfill even our basic needs we need to cooperate with other people. Cooperation is needed for a range of tasks and transactions, be it the adoption of a constitution by the citizens of a country, maintenance of common local grazing grounds and forest resources or exchanging one good for another. For cooperation we require trust. We need to answer the question: when will the parties cooperating with each other and who have reached an agreement trust one another to keep their word? Two conditions, if met could generate a system of beliefs where agreements will be kept. 1. At every stage of the agreed course of actions, it would be in the interest of each party to plan to keep his or her word if all others were to plan to keep their word. 2. At every stage of the agreed course of actions, each party would believe that all others would keep their word. The beliefs generated thus are self-confirming. That is, a set of beliefs that a certain course of actions will happen will bring about that course of actions. A course of actions satisfying condition 1 is called a Nash equilibrium. A Nash equilibrium is a course of actions (or strategy) per party, such that no party would have any reason to deviate from his or her course of actions if all other parties were to pursue their courses of actions. Society needs institutions where conditions 1 and 2 apply to sustain cooperation. There may be several such contexts wherein trust

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