Reputation and Uncertainty Reduction: Simulating Partner Selection

Computer simulations of the impact of reputation in ideal marketplaces are presented. The study concentrates on the link between choices at individual level (partner selection) and system level performance, measured in terms of goods' average quality. Partner selection is based on two different information exchange settings. In L1, information conveys only agent's evaluation of a target (Image). In L2, it also transmits what is heard, but not yet necessarily checked by present informer, about a target (Reputation). The results show that in L2, the system exhibits higher tolerance for informational uncertainty.