Solid advice:

How does this affect how you should handle relationships?

Oddly enough, nothing worked better than good ol’ tit-for-tat:

A tit-for-tat strategy plays the iterated prisoners’ dilemma game by cooperating on the first move, and then making the same choice as the other player did on the previous move. This strategy has been shown to be a very robust in that it does well with a wide variety of other strategies, provided that there is a sufficiently large chance that the same players will meet again.

That old rule we all know turned out to be incredibly robust. All it required was imitating the other player’s last move. If they’re cooperative, you cooperate. If they screw you, you screw them back.

Robert Axelrod, who documented the findings in his book, The Evolution of Cooperation, explained what we can learn from the findings:

“Tit-for-tat won the tournament, not by beating the other player, but by eliciting from the other player behavior that allowed both to do well.”

At least in the Prisoner’s Dilemma game, “doing unto others as they do unto you” may not put you ahead, but with time it educates others that, all other things being equal, it’s clearly more profitable to work with you than not.

So…

All things being equal, trust people or at least trust your gut. Early in ongoing relationships, consider tit-for-tat.

Depending on the importance or impact or priority of a relationship and what's going on with it trust becomes increasingly important.  Certainly trusting someone to pay you back a loan of $20 does not take as much trust as entering into a committed relationship.  

Our "gut" feelings can be very useful and reliable but is far from fool-proof.  In his book Thinking Fast and Slow, Daniel Kahneman shows just how unreliable our gut instinct can be.  It surprised me for sure.  Rather than simply following a gut feeling - to the degree the matter is important - it is useful to validate the gut feeling.  Even at that we can fall victim too!  Still, its far better to take a chance on love than to avoid the risk of being hurt.  Same for a business deal.  Sometimes its better to trust than not.  Who wants to live life as a paranoid anyway! :o)

Okay, tit for tat.  I think this is sound advice too.  However, I think kindness matters.  Keeping score can be a lot of work.  While there is a place for tit for tat, I think Adam Grant makes a compelling case in his book Give and Take for being a Giver....the successful kind of Giver.  

The successful kind of Giver is not tit for tat, but does not give indiscriminantly, right?

Right! :o)