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Dynamics of effort allocation and evolution of trust: an agent-based model

Behrooz Hassani Mahmooei and Brett Parris
Authors registered in the RePEc Author Service: Behrooz Hassani-Mahmooei ()

MPRA Paper from University Library of Munich, Germany

Abstract: Trust is a dynamic and complex phenomenon and understanding the factors which affect its formation, evolution and disappearance is a critical research issue. It has been shown that trust plays a key role in how human and social capital develop, how economies grow and how societies progress. In this paper, we present an agent-based model of the relations between a dynamic effort allocation system, an evolving trust framework and a reputation module to study how changes in micro-level rent-seeking traits and decisions can shape the emergence of trust across the simulated environment. According to our results, variations in trust are correlated more with the returns to being productive, rather than rent-seeking. In line with previous studies, our model shows that higher than average levels of risk-taking by agents lead to further trust and gains during an interaction, though taken to an extreme, both trust and gain can decline as a result of reckless decisions. We also report on the formation of trust clusters in our model as an emergent phenomenon.

Keywords: Trust; Rent-seeking; Agent-based Model; Reputation; Effort Allocation; Social Simulation (search for similar items in EconPapers)
JEL-codes: C61 C63 D72 (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-cbe, nep-cmp, nep-evo, nep-hrm and nep-soc
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