Rational Trust Modeling

Trust models are widely used in various computer science disciplines. The main purpose of a trust model is to continuously measure trustworthiness of a set of entities based on their behaviors. In this article, the novel notion of "rational trust modeling" is introduced by bridging trust management and game theory. Note that trust models/reputation systems have been used in game theory (e.g., repeated games) for a long time, however, game theory has not been utilized in the process of trust model construction; this is where the novelty of our approach comes from. In our proposed setting, the designer of a trust model assumes that the players who intend to utilize the model are rational/selfish, i.e., they decide to become trustworthy or untrustworthy based on the utility that they can gain. In other words, the players are incentivized (or penalized) by the model itself to act properly. The problem of trust management can be then approached by game theoretical analyses and solution concepts such as Nash equilibrium. Although rationality might be built-in in some existing trust models, we intend to formalize the notion of rational trust modeling from the designer's perspective. This approach will result in two fascinating outcomes. First of all, the designer of a trust model can incentivise trustworthiness in the first place by incorporating proper parameters into the trust function, which can be later utilized among selfish players in strategic trust-based interactions (e.g., e-commerce scenarios). Furthermore, using a rational trust model, we can prevent many well-known attacks on trust models. These two prominent properties also help us to predict behavior of the players in subsequent steps by game theoretical analyses

Restoring Damaged Trust with Promises, Atonement and Apology.

In an experiment using two consecutive trust games, we study how “cheap” signals such as promises and messages are used to restore damaged trust and encourage new trust where it did not previously exist. In these games, trustees made non-binding promises of investment-contingent returns, then investors decided whether to invest, and finally trustees decided how much to return. After an unexpected second game was announced, but before it commenced, trustees could send a one-way message. This naturalistic quasi-experimental design allowed us to observe the endogenous emergence of trust-relevant behaviors and focus on naturally occurring remedial strategies used by promise-breakers and distrusted trustees, their effects on investors, and subsequent outcomes. In the first game 16.6% of trustees were distrusted and 18.8% of trusted trustees broke promises. Trustees distrusted in the first game used promises closer to equal splits and messaging to encourage trust in the second game. To restore damaged trust, promise-breakers used larger new promises (signals of intended atonement) and messaging (usually with apology). On average, investments in each game paid off for investors and trustees, suggesting that cheap signals foster profitable trust-based exchanges in these economic games.promise, atonement, apology, cheap talk, cheap signals, remedial strategies, trust game, reciprocity, experiments

Discriminating strategic reciprocity and acquired trust in the repeated trust-game

In repeated trust-game offers made by investors can be attributed to strategic reciprocation-based behavior. However, when a trustee is loyal, personal trust can build up between players, in the same way that lack of positive reciprocation on the part of trustees can motivate investors' distrust. Acquired personal trust or distrust and strategic reciprocation of the opponent's offers have then a cumulative and convergent influence on behavior in the trust game and are not prima facie distinguishable. We propose an experimental protocol which discriminates between these two determinants of trust. We furthermore show that acquired trust is the mere outcome of anonymous repeated interactions taking place during the experiment in the sense that it does not co-vary with an initial and independent baseline disposition to trust among investors: acquired trust crowds out background trust. Moreover, offers are sensitive to the amount and variance of trustees' returns. High returns-rate contribute to increase acquired trust between the players while the volatility of trustees' counter-offers makes them perceive as opportunistic, triggers investors' strategic behavior and detriments the acquisition of personal trust.repeated trust-game, reputation, strategic reciprocation.

Trust, discrimination and acculturation Experimental evidence on Asian international and Australian domestic university students

Intercultural relations between Australia and Asia are pivotal to the economic prosperity of the Asia-Pacific region. However, there appears to be tension between Australian domestic and Asian international students at universities in Australia. To measure the degree of trust and patterns of discrimination between these groups, the Berg, Dickhaut and McCabe (1995) trust game and a series of control games were used in framework where each participant played each game against several partners. Controlling for individual heterogeneity, domestic students significantly discriminated against international students in the trust game, and individual discrimination was preference-based rather than based on beliefs towards international students’ trustworthiness. Moreover, the degree of in-group favouritism shown by domestic students was negatively correlated with the Big Five personality trait of Openness. Intercultural patterns across the games also pointed to a willingness of international students to build relations with domestic students. However, the average amount that they sent in the trust game was negatively related with the number of semesters studied at university in Australia, which may partly reflect cultural adjustment but also institutional disadvantages faced specifically by international students. The study furthers understanding of the patterns of discrimi-nation between domestic and international university students, the nature of this discrimination, and illustrates the extent of challenges faced by the Australian tertiary education sector.rust, discrimination, intercultural differences, economic experiments

Understanding Co-evolution in Large Multi-relational Social Networks

Understanding dynamics of evolution in large social networks is an important problem. In this paper, we characterize evolution in large multi-relational social networks. The proliferation of online media such as Twitter, Facebook, Orkut and MMORPGs\footnote{Massively Multi-player Online Role Playing Games} have created social networking data at an unprecedented scale. Sony's Everquest 2 is one such example. We used game multi-relational networks to reveal the dynamics of evolution in a multi-relational setting by macroscopic study of the game network. Macroscopic analysis involves fragmenting the network into smaller portions for studying the dynamics within these sub-networks, referred to as `communities'. From an evolutionary perspective of multi-relational network analysis, we have made the following contributions. Specifically, we formulated and analyzed various metrics to capture evolutionary properties of networks. We find that co-evolution rates in trust based `communities' are approximately $60\%$ higher than the trade based `communities'. We also find that the trust and trade connections within the `communities' reduce as their size increases. Finally, we study the interrelation between the dynamics of trade and trust within `communities' and find interesting results about the precursor relationship between the trade and the trust dynamics within the `communities'

An Economic Framework for Understanding Micro-Credit in Developing Countries

To reduce vulnerability and food insecurity this paper investigates the economics of micro-credit. We provide a model that shows how a micro-credit market based on trust can co-exist with a commercial collateral-based market. This model is developed in detail and certain propositions are supported using dominant strategies in a trust-honour game based on the prisoners dilemma. From a policy point of view the theoretical model indicates that trust-based lending, coupled with certain incentives, can go far in supporting growth opportunities in developing countries. It is argued that development policy should be flexible enough to permit trust-based micro-lending to the poor, regardless of how counter-intuitive this must appear to the conventional wisdom.Financial Economics,

Immigrant Assimilation, Trust and Social Capital

Trust is a crucial component of social capital. We use an experimental moonlighting game with a representative sample of the U.S. population, oversampling immigrants, to study trust, positive, and negative reciprocity between first-generation immigrants and native-born Americans as a measure of immigrant assimilation. We also survey subjects in order to relate trusting and trustworthy behavior with demographic characteristics and traditional, survey-based measures of social capital. We find that immigrants are as trusting as native-born U.S. citizens when faced with another native-born citizen, but do not trust other immigrants. Immigrants appear to be less trustworthy overall but this finding disappears when we control for demographic variables and the amount sent by the first mover. The length of time an immigrant has been a naturalized U.S. citizen appears to increase trustworthiness but does not affect trusting behavior. Women and older people are less likely to trust, but no more or less trustworthy.moonlighting game, trust, reciprocity, immigration, experiment

Coevolution of trustful buyers and cooperative sellers in the trust game

Many online marketplaces enjoy great success. Buyers and sellers in successful markets carry out cooperative transactions even if they do not know each other in advance and a moral hazard exists. An indispensable component that enables cooperation in such social dilemma situations is the reputation system. Under the reputation system, a buyer can avoid transacting with a seller with a bad reputation. A transaction in online marketplaces is better modeled by the trust game than other social dilemma games, including the donation game and the prisoner's dilemma. In addition, most individuals participate mostly as buyers or sellers; each individual does not play the two roles with equal probability. Although the reputation mechanism is known to be able to remove the moral hazard in games with asymmetric roles, competition between different strategies and population dynamics of such a game are not sufficiently understood. On the other hand, existing models of reputation-based cooperation, also known as indirect reciprocity, are based on the symmetric donation game. We analyze the trust game with two fixed roles, where trustees (i.e., sellers) but not investors (i.e., buyers) possess reputation scores. We study the equilibria and the replicator dynamics of the game. We show that the reputation mechanism enables cooperation between unacquainted buyers and sellers under fairly generous conditions, even when such a cooperative equilibrium coexists with an asocial equilibrium in which buyers do not buy and sellers cheat. In addition, we show that not many buyers may care about the seller's reputation under cooperative equilibrium. Buyers' trusting behavior and sellers' reputation-driven cooperative behavior coevolve to alleviate the social dilemma.Comment: 5 figure

Framing a trust game as a power game greatly affects interbrain synchronicity between trustor and trustee

We used dual electroencephalography (EEG) to measure brain activity simultaneously in pairs of trustors and trustees playing a 15-round trust game framed as a “trust game” versus a “power game”. Four major findings resulted: first, earnings in each round were higher in the trust than in the power game. Second, in the trust game, reaction time for strategic deliberations was significantly longer for the trustee than the trustor. In the power game, however, the trustee took longer to think about how much money to repay, whereas the trustor took longer to think about how much money to invest. Third, prediction accuracy for the amount exchanged was higher in the trust game than in the power game. Fourth, interbrain synchronicity gauged with the phase-locking value of alpha bands in the brain – especially the frontal and central regions – was higher in the power game than in the trust game. We infer that this last finding reflects elevated mutual strategic deliberation in the power game. These behavioral and neuroscience-based findings give a better understanding of the framing effects of a trust game on the strategic deliberations of both trustor and trustee seeking to attain wealth. Copyright © 2018 Informa UK Limite