We address the issue of trust among the principals in a multiparty transaction in a peer-to-peer systemrnimplementing a service-based architecture. We propose a model that allows peers to form instant federationsrnand collectively consummate complex business transactions. A transaction is done in two phases. In the firstrnphase services are selected and a federation is formed. In the second phase the services are executed basedrnon the precedence relations defined in the transaction. The peers are ‘passionate’ entities during the firstrnphase. For this phase a transitive trust model is used wherein trust among distant peers is established with eachrnother using a chain of intermediaries via mutual acquaintances. Once the federation is formed, the entitiesrnbecome rational and a secure environment is created to execute the transaction. For this phase a distributedrntrust model using simple public key infrastructure is proposed.
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