Formation of Common Investment Networks by Project Establishment between Agents

TL;DR

This paper introduces an investment model with trust-reputation mechanisms, demonstrating how agent interactions lead to wealth distribution patterns and the formation of realistic investment networks with key network properties.

Contribution

It presents a novel integrated model combining trust-reputation systems with investment interactions, revealing network formation and wealth distribution dynamics.

Findings

Wealth distribution follows a power law in the tail.

Trust and reputation mechanisms foster network formation with high clustering.

Networks exhibit properties similar to real-world investment networks.

Abstract

We present an investment model integrated with trust-reputation mechanisms where agents interact with each other to establish investment projects. We investigate the establishment of investment projects, the influence of the interaction between agents in the evolution of the distribution of wealth, as well as the formation of common investment networks and some of their properties. Simulation results show that the wealth distribution presents a power law in its tail. Also, it is shown that the trust and reputation mechanism presented leads to the establishment of networks among agents, which present some of the typical characteristics of real-life networks like a high clustering coefficient and short average path length.