Agent based computational model of trust

Alexander Gorobets and Bart Nooteboom

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: This paper employs the methodology of Agent-Based Computational Economics (ACE) to investigate under what conditions trust can be viable in markets. The emergence and breakdown of trust is modeled in a context of multiple buyers and suppliers. Agents adapt their trust in a partner, the weight they attach to trust relative to profitability, and their own trustworthiness, modeled as a threshold of defection. Adaptation occurs on the basis of realized profit. Trust turns out to be viable under fairly general conditions.

Keywords: agent-based computational economics; transaction costs; trust (search for similar items in EconPapers)
JEL-codes: C53 L14 L2 M M10 M12 (search for similar items in EconPapers)
Date: 2004-01-01
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