How does Game Theory Function in the Sharing Economy?


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The Independent recently published an article that describes how a major failing of the sharing economy is that it’s built on trust. People aren’t necessarily trustworthy, and sharing services will fail if they take trust for granted.

Why can’t people be trusted?

The concept of a “zero sum game” means that in order for someone to get a bigger piece of the pie another person has to give up some of their own.

What if, instead, the two actors could mutually benefit? When both parties benefit from a transaction the situation is called “win-win”.

I urge you to visit and play their game on game theory. While does require 30 minutes to complete it rewards you with insight into the nature of trust between people.

The conclusions from the game about the nature of trust are:


Trust keeps a relationship going, but you need the knowledge of possible future repeat interactions before trust can be established.


Each participant has to believe that the game can have positive results for both players. Such a ‘win-win’ scenario provides incentive for participants to trust one another as they are working towards a mutually beneficial outcome.


Miscommunication breaks down trust, but it helps to be forgiving and patient if incidents aren’t too frequent.

So how does this relate to the sharing economy?

The sharing economy facilitates win-win scenarios between participants. For instance, a person can earn money lending out their car when they aren’t using it, or rent out their home when they are on vacation. In order for these transactions to take place, however, each participant must have reason to trust the person on the other end of the exchange.

Trust profiles and insurance definitely helps build trust on a few different levels, but that only goes so far. It’s up to the transaction participants to play nice with one another.

When two people have never met, how do they trust each other in a given transaction? They can read reviews other strangers have left on their platform profile and learn about the other person’s transaction history and past behavior. Research shows that people have a tendency to trust crowd-based ratings for both products and services – ratings about individual people are no different.

If people have incentives to be on their best behavior, perhaps through the threat of bad reviews and a desire to engage in a successful transaction, the sharing economy will always produce win-win scenarios.

“In the short run, the game defines the players. But in the long run, it’s us players who define the game.”

Why the sharing economy will survive the trust crisis

We explored this in a previous post titled, “How Does The Sharing Economy Thrive In A “Trust Crisis”?”

Positive reviews bolster the standing of sharing service participants who engage in safe, enjoyable transactions. The threat of negative reviews, and consequently a decreased likelihood that others will want to engage in a transaction with such a person, also encourages good behavior. We at deemly strongly believe that Trust Profiles are the cross-platform solution to encouraging good behavior and fostering a safe environment in any sharing community.