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To be Others ’ Eyes and Ears ?-Trust and the Credibility of Reputation

Introduction The decision of trust is a frequently encountered issue for people of modern times. Buying used cars from strangers, donating money to charity organizations, and going to a new clinic are among the many examples where the placement of trust is involved. When making a decision, we rely on our past experiences and the information provided by others to evaluate the trustworthiness of the individuals we are dealing with. The latter mechanism includes formal channels, such as newspapers, and informal ones such as gossips spread in social networks. For the mechanism of reputation to work effectively, a precondition needs to be satisfied that the spread of reputation be efficient and flawless. This assumption, unfortunately, does not always stand in reality. Not only does the spread of reputation have limited access, but it might become distorted and biased when being disseminated longer and further. A remedy to the problem is to introduce a new mechanism of reputation of a higher level—the reputation of the information of reputation. For instance, the website “Epinions” implements the idea where users not only can get access to the information of products or services, but they also know to what extent those raters’ opinions reflect the truth. The puzzle remains unsolved as some questions subsequently arise: who is going to evaluate the information of reputation? And on what basis, if any? The paper presents a simple model to address the issue. In particular, the whole system is treated as an interplay operating constantly between individual actions and collective information. Agents’ trust decisions are guided by their memories and the information of reputation. The results of interactions are then fed back into the reputation system. In addition, agents re-evaluate the credibility of each information source in the reputation system by measuring the difference between the provided information and their own experiences. Agents learn to ignore dubious information sources and put more weight on the countable ones. When steady states are reached, both the module of trust actions and the credibility of information sources are in equilibrium—individual actions in equilibrium will be guided (partially) by the in-equilibrium reputation system, which receives feedback from the former.