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Exploring Credit Relationship Dynamics in an Interbank Market Benefiting from Blockchain-based Distributed Trust: Insights from an Agent-based Model

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  • Morteza Alaeddini

    (AUT - Amirkabir University of Technology, UGA - Université Grenoble Alpes, CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes)

  • Julie Dugdale

    (LIG - Laboratoire d'Informatique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)

  • Paul Reaidy

    (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes)

  • Philippe Madiès

    (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes)

Abstract

Trust is crucial in economic complex adaptive systems, where agents frequently change the other side of their interactions, which often leads to changes in the system's structure. In such a system, agents who seek as much as possible to build lasting trust relationships for long-term confident interactions with their counterparts decide whom to interact with based on their level of trust in existing partners. A trust crisis refers to the time when the level of trust between agents drops so much that there is no incentive to interact, a situation that ultimately leads to the collapse of the system. This paper presents an agent-based model of the interbank market and evaluates the effects of using a voting-based consensus mechanism embedded in a blockchain-based loan system on maintaining trust between agents and system stability. In this paper, we rely on the fact that blockchain as a distributed system only manages the existing trust and does not create it on its own. Furthermore, this study uses actual blockchain technology in its simulation rather than simply presenting an abstraction.

Suggested Citation

  • Morteza Alaeddini & Julie Dugdale & Paul Reaidy & Philippe Madiès, 2023. "Exploring Credit Relationship Dynamics in an Interbank Market Benefiting from Blockchain-based Distributed Trust: Insights from an Agent-based Model," Post-Print hal-04266077, HAL.
    • Handle: RePEc:hal:journl:hal-04266077
    DOI: 10.1007/978-3-031-34920-1_33
    Note: View the original document on HAL open archive server: https://hal.science/hal-04266077v1
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    References listed on IDEAS

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    Keywords

    Agent-based simulation; Asymmetric information; Confidence; Distributed ledger; Interbank call loan market; Uncertainty;
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