Forming Social Networks of Trust to Incentivize Cooperation

This paper introduces a new generic model to incentivize cooperation between parties that are engaged in the paradox of a social dilemma. The approach addresses the problem of direct reciprocity and uses the formation of collaborative relationships between individuals that are motivated by selfish behaviour: every individual seeks to interact with another that is at least as cooperative as itself. The establishment and maintenance of mutually beneficial relationships results in a dynamic social network where individuals cluster based on similarity of cooperation. Through prioritising these trusted relationships, the payoff an individual receives becomes positively correlated with their cooperation level. The model is demonstrated by individuals playing against each other via the single player prisoners dilemma game. The model is of particular relevance to contemporary distributed systems where there is no central authority to enforce cooperation yet unrelated parties are required to share their resources.