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Between Trust and Performance: Exploring Socio-Economic Mechanisms on Directed Weighted Regular Ring with Agent-Based Modeling

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  • Gao, Lin

Abstract

This paper explores the evolution of interaction and cooperation supported by individuals’ changing trust and trustworthiness on directed weighted regular ring though agent-based modeling. This agent-based model integrates fragility of trust, interaction decision, strategy decision, payoff matrix decision, interaction density and information diffusion. Marginal rate of exploitation of original payoff matrix and relative exploitation degree between the original and mutated payoff matrices are stressed in trust updating; influence of observing is introduced via imagined strategy; relation is maintained through relation maintenance strength. The impact of 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 on the sum of number of actual interaction and cooperation of all agents are probed on the base of a baseline simulation, respectively. Under the experimental design and parameter values selection in this paper, it is found that basically as degree of embeddedness in social network, proportion of high trust agents and probability of information diffusion in neighbors increase, as mutation probability of payoff matrix, conflict in mutated payoff matrix and probability of information diffusion in non-neighbors decrease, interaction and cooperation perform better.

Suggested Citation

  • Gao, Lin, 2017. "Between Trust and Performance: Exploring Socio-Economic Mechanisms on Directed Weighted Regular Ring with Agent-Based Modeling," MPRA Paper 78428, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:78428
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    File URL: https://mpra.ub.uni-muenchen.de/78428/8/MPRA_paper_78428.pdf
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    References listed on IDEAS

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    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. 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.
    3. Elsner, Wolfram & Heinrich, Torsten & Schwardt, Henning, 2014. "The Microeconomics of Complex Economies," Elsevier Monographs, Elsevier, edition 1, number 9780124115859.
    4. Caiani, Alessandro & Godin, Antoine & Caverzasi, Eugenio & Gallegati, Mauro & Kinsella, Stephen & Stiglitz, Joseph E., 2016. "Agent based-stock flow consistent macroeconomics: Towards a benchmark model," Journal of Economic Dynamics and Control, Elsevier, vol. 69(C), pages 375-408.
    5. 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.
    6. 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.
    7. 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.
    8. 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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    More about this item

    Keywords

    Trust; directed weighted regular ring; agent-based modeling; 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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