With the overwhelming diversity that can be found on the Internet and the sheer number of web sites that people have to choose from, something is needed to help them make choices. People often follow the advice of others when it comes to which sites they will visit, the movies they watch and even what products they buy. They base their judgements of whether or not to follow this advice partially upon the other person's reputation in helping to find reliable and useful information, even with all the noise.
Using and building upon early collaboration filtering techniques, reputation management software gather ratings for people, companies, and information sources. The reputation ratings can then be used to help steer interested parties toward sites and products that may be of interest. These types of software systems help us overcome information overload. On sites such as Slashdot and other online communities that offer product review information, it can also be used to filter out noise by not showing results of those with lower reputation ratings. In Reputation Systems: Facilitating Trust in Internet Interactions, Paul Resnick and associates suggest that reputation systems require: longevity, visible feedback from present and past transactions, and attention given to the track records of all parties. They state that reputation systems "help people decide whom to trust, encourage trustworthy behavior, and deter participation by those who are unskilled or dishonest."
When you are dealing with a stranger in an online situation, you do not have the advantage of having an historical relationship with them, which would give insight and clarification to their personality and morals. You really do not have anything to go on when it comes to deciding whether or not to buy something they are selling, especially if any amount of money is at stake. Trust is hard to come by when two strangers are involved in a monetary transaction, especially when there is not a system in place that rewards good behavior and punishes bad. "In some sense, a stranger's good name is not at stake. Given these factors, the temptation to "hit and run" outweighs the incentive to cooperate, since the future casts no shadow."
Reputation management software can create a track record for each user that acts as an incentive for them to exhibit good behavior and make them accountable for their actions. This is important because it adds elements of expectation and possible repercussions that can effect future interactions. "Reputation systems seek to restore the shadow of the future to each transaction by creating an expectation that other people will look back upon it," (Resnick) and attempt to create what "Robert Axelrod refers to as the 'shadow of the future'" (Resnick).
Reputation management software can track the quality of an individual's credibility, the value of specific information resources, and also the product history of a company in the form of ratings. These ratings can then be used to create a 'web of trust.' Chrysanthos Dellarocas, a researcher at the MIT Sloan Institute of Management, says that,
The production of trust is an important requirement for forming and growing open online trading communities. The lack of a common history with potential trading partners as well as the relative ease with which buyers and sellers can change partners from one transaction to the next, gives incentives to both parties to provide inferior service quality or to hold back on their side of the exchange (Dellarocas).
Dellarocas maintains that trust is a very important component in the virtual world of e-commerce and is a requirement when it comes to buying and selling on the Internet and "[t]he goal of reputation systems is to encourage trustworthiness in transactions by using past behavior as a publicly available predictor of likely future behavior" (Dellarocas).
The most famous of the auction sites, eBay, uses reputation management software to rate the reputation/trustworthiness of its buyers and sellers. Parties to the transactions are able to give feedback to each other and effect their ratings, based upon such things as the condition of the auction item, how quickly they ship it out, how well they communicated, and the speed of payment. The system has an important effect on buying and selling amongst strangers because it has a built-in mechanism for the development of trust. Part of the reputation system includes the Feedback Forum, where buyers and sellers can rate each other and comment on the quality of the interaction. Buyers feel safer when they can read the comments posted about a seller and view their track record, while sellers can expect the payment due them since their buyer has never reneged in the past. eBay's reputation management system motivates both buyers and sellers to be honest and play by the rules.
Slashdot, the online discussion community, has two mechanisms in place, which are based on reputation to manage the thousands of comments that users post each day. The system attempts to judge the information shared and the sharers of the information in order to gauge the quality and wisdom of both for the benefit of all. First, it gives users the ability to rate each other's posts, called 'Moderation,' in an attempt to reduce the signal-to-noise ratio. The resulting conversation can then be read in a variety of ways, such as by viewing only posts rated above a certain threshold. Posts are scored from -1 to 5, and a reader can set their viewing threshold to any score within that range. If, for example, the threshold is set to 3, the only comments seen will be those with scores of 3 or above. Setting the threshold to -1 will display all comments, 0 is almost all comments, 1 filters out most anonymous comments, and so on. Secondly, the system awards "karma" points to members according to how their posts are rated, permitting the posts of those with accumulated karma to be automatically set to a higher rating, as well as potentially giving them the ability to moderate.
Epinions is an independent company that endeavors to offer unbiased advice about products and services. Epinions uses a reputation management software system that helps to inform consumers before they make purchases, giving them access to personalized recommendations, reviews on a large number of products, and price comparisons. Epinions rates the services and products it reviews, and also those who write the reviews. It makes use of ratings, reviews, and user feedback to create reputations and instill a level of trust for both the reviewers and the products they rate in order to make e-commerce easier. In other words, you can have your own Web of Trust once you begin to trust and value the product ratings of particular reviewers based upon their track record and your personal preferences. Users can vote on the quality of a review once they have read one, and Epinions places the reviews that are rated the highest on top, which help reviewers build a good reputation and made money. A micropayment is paid out to a reviewer every time someone reads one of his or her reviews.
The Google search engine utilizes a reputation management scheme for the search results it returns from all the sites that it indexes. The system, called PageRank, is based upon reputation - the value of a returned site depends upon how well linked it is from other sites, as well as how well linked each of those other sites are ranked.
Given that reputation management is still in its infancy, there are many problems that need to be addressed in order to perfect the inner workings of such a system. For instance, Dellarocas has developed three possible methods that can be used in combination to make sure that a few users cannot distort the ratings that are presented by online e-commerce sites.
1. Controlled Anonymity -- Anonymity between buyers and sellers allows them to give honest assessments by reducing concerns of reprisal.
2. Median Filtering -- Rather than using simple average calculations to discover the mean of all ratings, more complex techniques can be used to ascertain the norm of the ratings by dropping exceptional scores to provide a more realistic picture.
3. Frequency Filtering -- To preserve the integrity of a reputation management system, an average rate of submission is determined, and based upon that, the scores from the most frequent reviewers should be removed to avoid a skewing of the results.
Resnick and associates have uncovered three related problems when it comes to eliciting feedback in an online reputation system:
1. Name changes and the use of pseudonyms effect the system if there is a possibility that a user can return with a new identity, thus erasing a previous negative reputation.
2. The inability to transfer reputations or feedback from one system to another. For example, a member of good standing member of eBay may want to have a review of their ratings made available on Amazon. Currently, there is no universal framework that can be used across systems.
3. Thirdly, there is a problem with the lack of meaningfulness in the feedback due to the various numerical rating systems that are used, since important nuances may be impossible to express using such a system.
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