More trust leads to less security expenses and more business proposals, thus creating wealth. But is the trust itself at the beginning of this causal chain, or something that enabled the trust? Because that would make a difference in the optimal behavior. Just starting to trust people around you might be a bad move.
As an example, if you are surrounded by bad people, and you start trusting them, you will probably get hurt. As another example, if in the past you were surrounded by bad people and now you are not, it is good to update properly, if you already haven’t. (Most people probably don’t update enough.) Alternatively, maybe your ability to detect bad people have improved, so the probability of the person you consider safe to be really safe has increased even if your environment stayed the same. (Or perhaps the important ability is to not speak about your ability to detect bad people, so you don’t get criticized all the time by the people who don’t have it.)
More trust leads to less security expenses and more business proposals, thus creating wealth. But is the trust itself at the beginning of this causal chain, or something that enabled the trust? Because that would make a difference in the optimal behavior. Just starting to trust people around you might be a bad move.
As an example, if you are surrounded by bad people, and you start trusting them, you will probably get hurt. As another example, if in the past you were surrounded by bad people and now you are not, it is good to update properly, if you already haven’t. (Most people probably don’t update enough.) Alternatively, maybe your ability to detect bad people have improved, so the probability of the person you consider safe to be really safe has increased even if your environment stayed the same. (Or perhaps the important ability is to not speak about your ability to detect bad people, so you don’t get criticized all the time by the people who don’t have it.)