Intertemporal Discount Factors as a Measure of Trustworthiness in Electronic Commerce

—In multiagent interactions, such as e-commerce and file sharing, being able to accurately assess the trustworthiness of others is important for agents to protect themselves from losing utility. Focusing on rational agents in e-commerce, we prove that an agent’s discount factor (time preference of utility) is a direct measure of the agent’s trustworthiness for a set of reasonably general assumptions and definitions. We propose a general list of desiderata for trust systems and discuss how discount factors as trustworthiness meet these desiderata. We discuss how discount factors are a robust measure when entering commitments that exhibit moral hazards. Using an online market as a motivating example, we derive some analytical methods both for measuring discount factors and for aggregating the measurements.

• Type: Journal
• Year: 2011
• Where: TKDE
• Authors: Christopher J. Hazard, Munindar P. Singh
• Keywords: Discount Factors, TKDE 2011, Trustworthiness, file Sharing