Trust strategy simulation of corporation–NPO cross alliance using evolutionary game theory

Abstract

Purpose

The purpose of this paper is to investigate the dynamics and evolution of trust in organizational cross alliances.

Design/methodology/approach

In alliances between corporations and nonprofit organizations, trust in decision-making is a dynamic process. Using the replicated dynamics model of evolutionary game theory, this paper provides a trust decision model and analyzes four scenarios under different parameters. A numerical simulation is developed to present an intuitive interpretation of the dynamic development of trust decisions and the effects of incentive and punishment mechanisms.

Findings

Under different parameters, bounded rationality and utilities result in different but stable evolutionary strategies; the initial probability of adopting a trust strategy leads directly to whether participants adopt the strategy when the system reaches stability after continued games; and incentive and punishment mechanisms can significantly reduce the initial probability of adopting a trust strategy where the system evolves to meet stable state needs.

Practical implications

The establishment of trust relationships is an important influence on the stable and coordinated development of an alliance. The proposed model can help the alliance build closer trust relationships and provide a theoretical basis for the design of the trust mechanism.

Originality/value

Incentive and punishment bound by some degree of trust are introduced to address the problems of trust decisions and their dynamics; the model created reflects the bounded rationality and utility of each game stage. Useful evolutionary stable strategies using different variables are proposed to address the decision-making problems of trust in cross alliances.

Citation

Chen, Y. and Sun, L. (2017), "Trust strategy simulation of corporation–NPO cross alliance using evolutionary game theory", Kybernetes, Vol. 46 No. 3, pp. 450-465. https://doi.org/10.1108/K-03-2016-0034