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Trust and Performance: Exploring Socio-Economic Mechanisms in the “Deep” Network Structure with Agent-Based Modeling

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  • Gao, Lin

Abstract

This paper extends the concept of interaction platforms and explores the evolution of interaction and cooperation supported by individuals’ changing trust and trustworthiness on directed weighted regular ring network from the angle of micro scope by using agent-based modeling. This agent-based model integrates several considerations below via a relatively delicate experimental design: 1) a characteristic of trust is that trust is destroyed easily and built harder (Slovic, 1993); 2) trustworthiness may be reflected on both strategy decision and payoff structure decision; 3) individuals can decide whether or not to be involved in an interaction; 4) interaction density exists, not only between neighbors and strangers (Macy and Skvoretz, 1998), but also within neighbors; 5) information diffusion. In this agent-based model, marginal rate of exploitation of original payoff matrix and relative exploitation degree between two payoff matrices are stressed in their influence of trust-destroying; influence of observing is introduced via imagined strategy; relationship is maintained through relationship maintenance strength, and so on. This paper treats number of immediate neighbors, degree of embeddedness in social network, mutation probability of payoff matrix, mutated payoff matrix, proportion of high trust agents and probabilities of information diffusion within neighborhood and among non-neighbors as important aspects happening on interaction platforms, and the influences of these factors are probed respectively on the base of a base-line simulation.

Suggested Citation

  • Gao, Lin, 2016. "Trust and Performance: Exploring Socio-Economic Mechanisms in the “Deep” Network Structure with Agent-Based Modeling," MPRA Paper 75214, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:75214
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    File URL: https://mpra.ub.uni-muenchen.de/75214/1/MPRA_paper_75214.pdf
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    References listed on IDEAS

    as
    1. Whan-Seon Kim, 2009. "Effects of a Trust Mechanism on Complex Adaptive Supply Networks: An Agent-Based Social Simulation Study," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 12(3), pages 1-4.
    2. Wolfram Elsner, 2007. "Why Meso? On “Aggregation” and “Emergence”, and Why and How the Meso Level is Essential in Social Economics," Forum for Social Economics, Taylor & Francis Journals, vol. 36(1), pages 1-16, January.
    3. John Geanakoplos & Robert Axtell & J. Doyne Farmer & Peter Howitt & Benjamin Conlee & Jonathan Goldstein & Matthew Hendrey & Nathan M. Palmer & Chun-Yi Yang, 2012. "Getting at Systemic Risk via an Agent-Based Model of the Housing Market," American Economic Review, American Economic Association, vol. 102(3), pages 53-58, May.
    4. Wolfram Elsner, 2010. "The process and a simple logic of ‘meso’. Emergence and the co-evolution of institutions and group size," Journal of Evolutionary Economics, Springer, vol. 20(3), pages 445-477, June.
    5. Tesfatsion, Leigh & Judd, Kenneth L., 2006. "Handbook of Computational Economics, Vol. 2: Agent-Based Computational Economics," Staff General Research Papers Archive 10368, Iowa State University, Department of Economics.
    6. Nicholas Seltzer & Oleg Smirnov, 2015. "Degrees of Separation, Social Learning, and the Evolution of Cooperation in a Small-World Network," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 18(4), pages 1-12.
    7. Viktoria Spaiser & David J. T. Sumpter, 2016. "Revising the Human Development Sequence Theory Using an Agent-Based Approach and Data," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 19(3), pages 1-1.
    8. Elsner, Wolfram & Heinrich, Torsten, 2009. "A simple theory of 'meso'. On the co-evolution of institutions and platform size--With an application to varieties of capitalism and 'medium-sized' countries," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 38(5), pages 843-858, October.
    9. A. Pyka & G. Fagiolo, 2007. "Agent-based Modelling: A Methodology for Neo-Schumpetarian Economics," Chapters,in: Elgar Companion to Neo-Schumpeterian Economics, chapter 29 Edward Elgar Publishing.
    10. Wolfram Elsner & Henning Schwardt, 2015. "From Emergent Cooperation to Contextual Trust, and to General Trust: Overlapping Meso-Sized Interaction Arenas and Cooperation Platforms as a Foundation of Pro-Social Behavior," Forum for Social Economics, Taylor & Francis Journals, vol. 44(1), pages 69-86, April.
    11. Elsner, Wolfram & Schwardt, Henning, 2014. "Trust and arena size: expectations, institutions, and general trust, and critical population and group sizes," Journal of Institutional Economics, Cambridge University Press, vol. 10(01), pages 107-134, March.
    12. Shu-Heng Chen & Bin-Tzong Chie & Tong Zhang, 2015. "Network-Based Trust Games: An Agent-Based Model," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 18(3), pages 1-5.
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    Keywords

    Trust; trustworthiness; directed weighted regular ring network; agent-based modeling; marginal rate of exploitation; relative exploitation degree; imagined strategy; relationship maintenance strength; number of neighbors; degree of embeddedness in social network; mutation of payoff matrix; information diffusion; social mobility; institutional quality; evolution of interaction; evolution of cooperation;

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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