Punishment,Reputation And Reconstruction Of Trust

Firstly, this article reviews the research findings of Chinese and overseas scholars with respect to the trust problem, including the understanding of sociology and economics of foreign scholars from trust definition, trust function and trust structure which influence the establish of trust, besides the article discusses the trust study of our country.Secondly, the article describes the relationship between information and trust, to a certain extent, trust is an information problem, therefore, we focus on the impact of asymmetry, dissemination of information and signal on trust which includes the signal propagation, the mechanism of signal design and the cause of the signal failure. Since the formation of trust includes two most important mechanisms which are the punishment mechanism and reputation mechanisms, then, the article describes the specific operation of the two mechanisms, as cooperation can not be achieved through one game, the introduction of punishment works out this problem by changing Nash equilibrium in the model, by using comparative static analysis, we obtain more realistic conclusion.In the next, the article describes bilateral punishment mechanism, multilateral punishment mechanism and trilateral punishment mechanism, which highlights the role of the law, because of the scope, the contract can not be confirmed, the system is not complete and the implementation of cost, punishment mechanism has its inherent limitations.Another mechanism for the formation of trust is the reputation mechanism, compared to punishment mechanism, the implementation of the reputation mechanism lowers the cost, in many cases, the law is powerless, and only reputation mechanism can be worked out, in the chapter, we discuss the formation of reputation by introducing the repeated game under complete information and incomplete information. It is unlikely to produce cooperation under limited repeated games, Kreps's reputation model, which opened a prisoner's dilemma paradox, then we introduce the trigger strategy and tit for tat strategy, the trigger strategy is a strategy of relatively cold, I trust you first, if you abuse my trust on you, I will never trust you, trigger strategy is certainly more ruthless. However, the result is that cooperation will be maintained, so it is a Nash equilibrium strategy, in the tit for tat strategy, if you are honest, I'll be honest, if you betray I will betray we can see that, when the discount factor is large enough, tit for tat strategy is the Nash equilibrium, if discount factor is relatively small, the participants would rather betray. Under incomplete information repeated game, we construct a two-stage game, which the each side has private information, as long as the game repeats enough times, even a little uncertainty can lead to cooperative behavior, next, the paper forms a questionnaire to prove the production in the finite repeated games by comparing to the experiment of Axelrod's, and proposes some inconsistent advices. Reputation is the result of repeated games, so companies should try to establish their own reputation to give their long-term benefits. Reputation can't be formed overnight, but it can be destroyed in an instant, higher reputation of organizations have little opportunistic behavior, next by introducing a reputation mechanism into the Prisoner's Dilemma model, we can see that it changes the Nash equilibrium. As a business is an information carrier, composed by the individuals, so the article analyzes the personal reputation and collective reputation, through a simple model, the article establishes a collective interaction between two members, there are differences in reputation between organizations, so the general reputable organizations seek rents from more reputable organizations, then the pyramid structure of social trust is formed.At this stage of the economic transition in China, the Government should keep its promise to extend the chain of the organizations and maintain the trust of the community atmosphere, so that the pyramid structure of social trust can be built higher. in order to combine with the practice, the paper cites Taobao case analysis.In the ending, this article puts forward some proposals to reconstruct the trust, such as the government should improve the legal system, enhance their own credibility, encourage free competition, take into accounts of the interests of all parties, the organization should continually reinforce their reputation assets investments, strengthen property rights system,. besides, the government should develop the role of credit bureau an social organizations. Because there are many factors that affect the trust, the analysis from the economic view only is not enough, so the reconstruction of the trust will be a complex and a lengthy process to go.The characteristics of this article is the analysis of the behavior with relates to parties, it emphasizes the use of the game theory which is applied to every part of this article, for example, in the punishment mechanism and reputation mechanism, it brings the comparative static analysis to the part in order to manifest how the parameters affect the behavior of the players. In the most important sections, the paper combines the theory to practice to make the theory more appropriate to life.