Human Nature in the Adaptation of Trust

Abstract

This chapter pleads for more inspiration from human nature, in agent-based modeling. As an illustration of an effort in that direction, it summarizes and discusses an agent-based model of the build-up and adaptation of trust between multiple producers and suppliers. The central question is whether, and under what conditions, trust and loyalty are viable in markets. While the model incorporates some well known behavioural phenomena from the trust literature, more extended modeling of human nature is called for. The chapter explores a line of further research on the basis of notions of mental framing and frame switching on the basis of relational signaling, derived from social psychology.

Keywords: trust; transaction costs, buyer-supplier relationships, social psychology

JEL Classification: A14, D01, D64, L14, L24, Z13