This paper employs the methodology of Agent-Based Computational Economics (ACE) to investigate under what conditions trust can be viable in markets. The emergence and breakdown of trust is modeled in a context of multiple buyers and suppliers. Agents adapt their trust in a partner, the weight they attach to trust relative to profitability, and their own trustworthiness, modeled as a threshold of defection. Adaptation occurs on the basis of realized profit. Trust turns out to be viable under fairly general conditions.

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ERIM Report Series Research in Management
Erasmus Research Institute of Management

Gorobets, A., & Nooteboom, B. (2004). Agent based computational model of trust (No. ERS-2004-108-ORG). ERIM Report Series Research in Management. Retrieved from