Trust and Reputation in Dynamic Electronic Markets

Networked computers and multi-agent systems (MAS) are commonly used as a platform for a new range of applications, many of which feature dynamic network infrastructures, heterogeneous components, unpredictable events, sub-optimal operation (failure to comply to specifications), incomplete and inconsistent information, absence of centralised control, and so on. This paper focuses on the role of trust relationships and reputation in regulating the function of such applications and in particular, open, agent mediated, electronic markets. We develop a computational formalisation of trust and reputation, that integrates with the micro-economic decisions of the agents, these socio-cognitive agents are capable of rational choice, but also directed by their social relations. By combining trust and micro-economic reasoning our model not only protects against malice and incompetence, but also enables the agents’ performance outcomes to compliment their owners’ goals. Thus, even though the model improves the agents’ defences, we ensure this interferes as little as possible with their economic activity, as doing so would inhibit the market’s ability to allocate resources efficiently.