Abstract

Unlike the supergame model assumes agents in exchange situations will normally not be perfectly informed on past behaviour of their partners. Also, they will be able to choose their partners to a certain extend. A formal model is presented that attempts to take account of these facts. It is supposed that for any actor the probability of finding a partner for a lucrative exchange depends on his past behaviour. A model of reputation formation is presented as a formal description of this interdependency. Based on this model it is shown that under certain conditions only co-operative conduct will pay in the long run. Thus it is confirmed that - given the mechanism of trust - rational agents may act trustworthy.