Third Party Reviews and Trust Formation

This paper formulates a subjective trust game in order to investigate the trust formation processes between a truster and a trustee, who have different cognitive schemes. Furthermore, as the institutional designs to build a trust relationship between them, alternative forms of third party reviews, i.e., (1) a single reviewer, (2) multiple reviewers, (3) multiple reviewers with interpreters, are presented. Especially, an optimal composition of reviewers in the third party is examined for the mechanism of checks and balances among the members to be worked well.