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Trust, Reputation, And Exit in Exchange Relationships

Author

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  • Bernd Lahno

    (University of Duisburg)

Abstract

Contrary to the assumptions of the supergame model, agents in exchange situations will normally not be perfectly informed about past behavior of their partners. Moreover, they will generally be in a position to choose their partners. The formal model of this article attempts to take account of these facts. It is presupposed that, for any actor, the probability of finding a partner for an advantageous exchange depends on his or her past behavior. A model of reputation formation is presented as a formal description of this dependency. On the basis of this model, it is shown that, under certain conditions, only cooperative conduct will pay in the long run. Thus it is confirmed that, given a suitable mechanism of trust, rational agents may act trustworthy.

Suggested Citation

  • Bernd Lahno, 1995. "Trust, Reputation, And Exit in Exchange Relationships," Journal of Conflict Resolution, Peace Science Society (International), vol. 39(3), pages 495-510, September.
    • Handle: RePEc:sae:jocore:v:39:y:1995:i:3:p:495-510
    DOI: 10.1177/0022002795039003005
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    Cited by:

    1. Giangiacomo Bravo & Lucia Tamburino, 2008. "The Evolution of Trust in Non-Simultaneous Exchange Situations," Rationality and Society, , vol. 20(1), pages 85-113, February.
    2. Andrew Kydd, 2000. "Overcoming Mistrust," Rationality and Society, , vol. 12(4), pages 397-424, November.
    3. Maroš Servátka & Steven Tucker & Radovan Vadovič, 2011. "Building Trust—One Gift at a Time," Games, MDPI, vol. 2(4), pages 1-22, September.
    4. Buskens, Vincent, 2003. "Trust in triads: effects of exit, control, and learning," Games and Economic Behavior, Elsevier, vol. 42(2), pages 235-252, February.
    5. Thanh Thu Do, "undated". "A Review Of The Role Of Collectors In Vietnams Rice Value Network," Review of Socio - Economic Perspectives 201713, Reviewsep.

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