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

  • SI: ICORE2011
  • Published:
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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.

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Notes

  1. The distance between two agents, one at (x 1, y 1) and the second one at (x 2, y 2) is measured as \(\sqrt{} ((x_{2} - x_{1})^{2} + (y_{2} - y_{1})^{2})\).

  2. As H and D are link variables, when we refer to an honest (or H) agent or dishonest (or D) agent, we are actually referring to an agent who is undertaking a H or D strategy in one interaction over one of her links.

  3. It calculates the Akaike information criterion for measuring the goodness of fit. Source: http://stat.ethz.ch/R-manual/R-devel/library/MASS/html/stepAIC.html.

  4. According to the documentation, leaps “performs an exhaustive search for the best subsets of the variables in x for predicting y in linear regression, using an efficient branch-and-bound algorithm.” Source: http://cran.r-project.org/web/packages/leaps/leaps.pdf.

  5. http://cran.r-project.org/web/packages/sna/sna.pdf.

  6. http://igraph.sourceforge.net/.

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Authors and Affiliations

  1. Department of Econometrics and Business Statistics, Monash University, Melbourne, VIC, 3800, Australia

    Behrooz Hassani-Mahmooei & Brett W. Parris

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  1. Behrooz Hassani-Mahmooei
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  2. Brett W. Parris
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Correspondence to Behrooz Hassani-Mahmooei.

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Hassani-Mahmooei, B., Parris, B.W. Dynamics of effort allocation and evolution of trust: an agent-based model. Comput Math Organ Theory 20, 133–154 (2014). https://doi.org/10.1007/s10588-013-9164-z

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