Trust as a Tradable Commodity: a Foundation for Safe Electronic Marketplaces

In large electronic marketplaces populated by buying and selling agents, it is difficult to judge trustworthiness. A variety of systems have been proposed to help traders to find trustworthy partners by learning to discount or disregard disreputable parties. In this paper, we present a novel model for providing safe electronic marketplaces: Commodity Trunits, a system that considers trust as a tradable commodity. In this system, sellers require units of trust (trunits) in order to participate in transactions, and risk losing trunits if they act dishonestly. Sellers can purchase trunits when needed, and sell excess quantities. We demonstrate that under Commodity Trunits, rational sellers will choose to be honest, since this is the profit maximizing strategy. We also show that Commodity Trunits provides protection from a number of vulnerabilities common in existing trust and reputation systems, e.g., the important exit problem, where sellers can cheat without fear of repercussions if they intend to leave the market. We then present a simulation that validates the system by demonstrating that a market operator can manage the trunit marketplace to ensure sustainability. We conclude with a discussion of the value of Commodity Trunits as a method for promoting trust in electronic marketplaces. ∗This is the pre-peer reviewed version of the following article: (Trust as a Tradable Commodity: A Foundation for Safe Electronic Marketplaces, Reid Kerr and Robin Cohen, Computational Intelligence, Volume 26, Number 2, Copyright 2010, Wiley-Blackwell), which has been published in final form at http://www3.interscience.wiley.com/journal/123387568/abstract.