Sudden trust collapse in networked societies

João Gama Batista (), Jean-Philippe Bouchaud and Damien Challet

The European Physical Journal B: Condensed Matter and Complex Systems, 2015, vol. 88, issue 3, 1-11

Abstract: Trust is a collective, self-fulfilling phenomenon that suggests analogies with phase transitions. We introduce a stylized model for the build-up and collapse of trust in networks, which generically displays a first order transition. The basic assumption of our model is that whereas trustworthiness begets trustworthiness, panic also begets panic, in the sense that a small decrease in trustworthiness may be amplified and ultimately lead to a sudden and catastrophic drop of collective trust. We show, using both numerical simulations and mean-field analytic arguments, that there are extended regions of the parameter space where two equilibrium states coexist: a well-connected network where global confidence is high, and a poorly connected network where global confidence is low. In these coexistence regions, spontaneous jumps from the well-connected state to the poorly connected state can occur, corresponding to a sudden collapse of trust that is not caused by any major external catastrophe. In large systems, spontaneous crises are replaced by history dependence: whether the system is found in one state or in the other essentially depends on initial conditions. Finally, we document a new phase, in which agents are well connected yet distrustful. Copyright EDP Sciences, SIF, Springer-Verlag Berlin Heidelberg 2015

Keywords: Statistical and Nonlinear Physics (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (6)

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Working Paper: Sudden Trust Collapse in Networked Societies (2015)
Working Paper: Sudden trust collapse in networked societies (2015)
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DOI: 10.1140/epjb/e2015-50645-1

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