Building Trust On-Line: The Design of Reliable Reputation Reporting : Mechanisms for Online Trading Communities

Abstract:     
Several properties of online interaction are challenging the accumulated wisdom of trading communities on how to produce and manage trust. Online reputation reporting systems have emerged as a promising trust management mechanism in such settings. The objective of this paper is to contribute to the construction of online reputation reporting systems that are robust in the presence of unfair and deceitful raters. The paper sets the stage by providing a critical overview of the current state of the art in this area. Following that, it identifies a number of important ways in which the reliability of the current generation of reputation reporting systems can be severely compromised by unfair buyers and sellers. The central contribution of the paper is a number of novel "immunization mechanisms" for effectively countering the undesirable effects of such fraudulent behavior. The paper describes the mechanisms, proves their properties and explains how various parameters of the marketplace microstructure, most notably the anonymity and authentication regimes, can influence their effectiveness. Finally, it concludes by discussing the implications of the findings for the managers and users of current and future electronic marketplaces and identifies some important open issues for future research.

Working Paper Series