Analysing the Relationship between

Risk and TrustBy Audun Jøsang and Stéphzne Lo Presti

Roadmap• Risk-Trust in Literature•Measuring Risk-Trust• Decision via Risk• Balancing Trust and Risk

• Conclusion

Risk-Trust in Literature• Concept of Trust

• Trust is the extent to which one party is willing to depend on somebody, or something, in a given situation with a feeling of relative security, even though negative consequences are possible.

• Concept of Risk• Anticipated hazard, measurable

• Trust vs. Risk• Both difficult to scale• Both upon uncertainty and unpredictability• Relationship between them (antecedent, alternative, outcome)?

uncertaintyrisk

subjectivity

Risk-Trust in Literature• A risk-trust model by fuzzy logic [Manchala1998]• (trans_history, cost) -> trust

Measuring Risk-Trust : Decision via Risk

• Expected Utility (EU)

• : non-linear utility function of monetary value

• : risk averse• : risk seeking• : risk-neutral

• Expected Monetary Value (EV)

• : the monetary investment/bet• : the probability of the th outcome• : the gain factor of the outcome,

given

• Risk-Neutral Case()

Expected Gain

Measuring Risk-Trust : Decision via Risk• For Decision

• : probability of successful transaction• : gain factor to a successful transaction • : loss factor to a failed transaction

Measuring Risk-Trust : Decision via Risk• For Decision

• : the total capital• : fraction of the total capital

• varies in the same direction of and • E.g. • : factor moderating the influence of , or risk attitude• Low – risk-taking; high – risk-aversion;

Measuring Risk-Trust : Balancing Trust - Risk• “The outcome of the transaction depends on somebody or something

and that the relying party is uncertain about the outcome of the transaction.”• Paraphrase : the reliability of for producing a successful outcome• Reliability Trust: the trusting party’s probability estimate of success

of the transaction

Measuring Risk-Trust : Balancing Trust - Risk• Decision Trust• to normalize different between ’s reliability and the cut-off probability on an

agent’s decision surface (risk attitude), given (1) risk attitude defined by a decision surface, and (2) transaction outcome upon and •

• : decision surface• : probability producing a successful outcome, given and • : cut-off probability on for the same and

Measuring Risk-Trust : Balancing Trust - Risk• Decision Trust• (0,-1), (,0), and (1,1)• Decision trust depended on a distance between and • , trusting for the transaction• , undecided• , not trusting

ConclusionSummary• To derive a computational model

for risk-trust• Reliability trust: probability of

success of the transaction• Decision trust: considering risk

attitude, complete the notion of trust

Shortcomings:• Success of an operation is more

complex than reliability of • Behavior modelling

Thank You