When contracts are not enforceable, or property rights are not clearly defined, individuals may lack an incentive to carry out costly investments even when they are socially efficient. Some recent contributions such as Ellingsen and Robles (2002) prove that this problem may be less dramatic than...

We discuss the emergence of cooperation in repeated Trust Mini-Games played by finite automata. Contrary to a previous result obtained by Piccione and Rubinstein (1993), we first prove that this repeated game admits two Nash equilibria, a cooperative and a non-cooperative one. Second, we show...