Surreal illustration of a glass bridge supported by stone pillars.

Is Trust Too Fragile? How Scoundrels Might Accidentally Save Us

Beau Callahan in Business & Economy August 2025 • 4 min read.

"New economic research reveals the surprising role of untrustworthy individuals in maintaining societal trust."

In an increasingly interconnected world, trust serves as the bedrock of our interactions. From simple transactions to complex agreements, our ability to rely on others shapes our economic and social landscapes. But what happens when trust is violated? How easily can it be broken, and what can we do to protect it? These questions are not merely philosophical; they have profound implications for how we organize and conduct our lives.

New research offers a surprising perspective on this critical issue. Economists Luca Anderlini, Larry Samuelson, and Daniele Terlizzese examine the dynamics of trust in a society where some individuals are inherently untrustworthy—'scoundrels' who cheat at every opportunity. Their findings challenge conventional wisdom, suggesting that the presence of these bad actors can, paradoxically, make trust more robust.

This article delves into their fascinating model, exploring how the proportion of scoundrels in a society affects the fragility and resilience of trust. We'll uncover why a society with too few scoundrels can be surprisingly vulnerable to disruptions of trust and what this means for building stronger, more reliable communities.

Why a Few Bad Apples Can Be Good for the Bunch

Surreal illustration of a glass bridge supported by stone pillars.

The researchers construct an economic model where interactions are more productive when individuals trust each other to refrain from cheating. However, the population includes two types of individuals: responsives and scoundrels. Responsives cheat only when the cost is low. Scoundrels, on the other hand, cheat at every opportunity, regardless of cost. The model reveals that the presence of scoundrels creates multiple equilibria—stable states of trust and distrust within the economy.

Multiple Equilibria is exhibited in the study, and depends of the cheating costs, here is a illustration of these equilibria:

High-Trust Equilibrium: A state where most people trust each other, interactions are productive, and cheating is rare.
Low-Trust Equilibrium: A state where trust is low, cheating is common, and interactions are less productive.
Unstable Equilibrium: A precarious middle ground between the high-trust and low-trust states.

The model's key insight is that the proportion of scoundrels significantly affects the stability of these equilibria. When the proportion of scoundrels is very low, the high-trust equilibrium becomes surprisingly fragile. Even small disruptions—a few instances of cheating or the introduction of a small number of low-trust individuals—can cause the entire system to unravel and collapse into the low-trust equilibrium. Conversely, when scoundrels are present, the high-trust equilibrium becomes more resistant to such shocks.

Striking a Balance: The Right Dose of Distrust

The research highlights a subtle but important point: trust isn't simply about eliminating untrustworthy behavior. Sometimes, a bit of distrust—a few scoundrels in the mix—can make the overall system more robust. This counterintuitive finding suggests that societies should focus not only on fostering trust but also on understanding the dynamics that make trust resilient in the face of inevitable violations. By accepting some 'scoundrels,' the good equilibrium has more robustness.

About this Article -

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This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2403.12917,

Title: When Is Trust Robust?

Subject: econ.th

Authors: Luca Anderlini, Larry Samuelson, Daniele Terlizzese

Published: 19-03-2024

Everything You Need To Know

What is the main argument of the research regarding trust and the role of untrustworthy individuals, or "scoundrels", in society?

The central argument posits that the presence of "scoundrels" can paradoxically make societal trust more resilient. The research by Luca Anderlini, Larry Samuelson, and Daniele Terlizzese suggests that while trust is crucial for interactions, a society with a very low proportion of untrustworthy individuals is surprisingly vulnerable to disruptions. The existence of "scoundrels", who cheat regardless of the cost, helps in maintaining multiple equilibria and makes the high-trust equilibrium more robust against shocks.

How does the presence of "scoundrels" influence the stability of the high-trust and low-trust equilibria, according to the research?

The research reveals that the proportion of "scoundrels" has a significant impact on the stability of the equilibria. In the "High-Trust Equilibrium", most people trust each other, and cheating is rare. In contrast, in the "Low-Trust Equilibrium", trust is low, and cheating is common. The presence of "scoundrels" makes the high-trust state more resistant to disruptions. When there are very few "scoundrels", the high-trust equilibrium becomes fragile, and even a small amount of cheating can lead to a collapse into the low-trust equilibrium. The "Unstable Equilibrium" represents a precarious middle ground.

Can you explain the different types of individuals, "responsives" and "scoundrels", and how they behave within the economic model?

The model distinguishes between two types of individuals: "responsives" and "scoundrels". "Responsives" are individuals who cheat only when the cost of doing so is low. In contrast, "scoundrels" are inherently untrustworthy and cheat at every opportunity, regardless of the cost. This difference in behavior is crucial to the model's findings. The presence of "scoundrels" creates a dynamic where their consistent cheating behavior can help to define the boundaries of trust, thus contributing to the resilience of the high-trust equilibrium.

What are the implications of the research for building stronger and more reliable communities?

The research suggests that fostering trust alone isn't sufficient for building resilient communities. Societies should also understand and account for the dynamics that make trust robust against violations. The study's findings imply that eliminating all untrustworthy behavior might not be the most effective approach. Instead, communities should focus on maintaining a balance. The presence of some "scoundrels" can contribute to the resilience of the high-trust equilibrium, which is essential for productive interactions.

How does the concept of multiple equilibria, including the high-trust, low-trust, and unstable states, relate to the fragility of trust in society?

The concept of multiple equilibria is central to understanding the fragility and resilience of trust. The model identifies three states: "High-Trust Equilibrium," "Low-Trust Equilibrium," and "Unstable Equilibrium." The "High-Trust Equilibrium" represents a stable state where trust is prevalent, and cheating is rare. The "Low-Trust Equilibrium" is a state of low trust and frequent cheating. The "Unstable Equilibrium" is a fragile middle ground. The proportion of "scoundrels" determines the stability of these states. When "scoundrels" are present, the "High-Trust Equilibrium" becomes more robust, and less susceptible to disruptions, demonstrating that trust is not a simple binary but a dynamic system influenced by the prevalence of trustworthy and untrustworthy actors.