Int. J. Internet Technology and Secured Transactions, Vol. x, No. x, 200x 81 Copyright © 2007 Inderscience Enterprises Ltd. Initial trust formation in Virtual Organisations Tatyana Ryutov*, Clifford Neuman, Li Zhou and Noria Foukia Information Sciences Institute, University of Southern California, 4676 Admiralty Way, Suite 1001, Marina del Rey, CA 90292, USA Fax: (310) 823-6714 E-mail: tryutov@isi.edu E-mail: zhoulia2000@hotmail.com E-mail: nfoukia@infoscience.otago.ac.nz Website: http://clifford.neuman.name *Corresponding author Abstract: We present a conceptual framework that introduces key concepts capturing initial trust establishment in on-demand Virtual Organisations (VO). This framework can be used to develop trust formation protocols and policies. The framework can serve as a basis for implementing an automated system that facilitates the establishment of a VO, considerably reduces the effort for setting up a VO and consequently reduces the VO’s time to operation. A novel aspect of the initial trust establishment described in this paper is the consideration of the mutual trust effects of the participants’ behaviour during the trust negotiation process. Keywords: virtual organisation; VO; trust formation. Reference to this paper should be made as follows: Ryutov, T., Neuman, C., Zhou, L. and Foukia, N. (2007) ‘Initial trust formation in Virtual Organisations’, Int. J. Internet Technology and Secured Transactions, Vol. x, No. x, pp.xxx–xxx. Biographical notes: Tatyana Ryutov received an MS Degree in Applied Mathematics from Moscow State University, Russia, in 1991, and MS and PhD Degrees in Computer Science from the University of Southern California (USC), in 1999 and 2002, respectively. She joined USC/ISI in 1996 working as a Graduate Research Assistant, and focused on the development and implementation of the access control framework for distributed systems that supports active policies adaptive to network threat conditions. Currently, she is working as a Computer Scientist at the Information Sciences Institute of the USC. Clifford Neuman received an SB from MIT and MS and PhD Degrees from the University of Washington. He is Director of the USC Centre for Computer Systems Security, a researcher at the Information Sciences Institute (ISI), and a faculty member in the Computer Science Department at the University of Southern California (USC). He is principal designer of the Kerberos authentication system, developed the NetCheque and NetCash electronic payment systems, and the Prospero Directory Service.