Reputation Inflation

59 Pages Posted: 8 Mar 2018  

Apostolos Filippas

New York University (NYU) - Department of Information, Operations, and Management Sciences

John J. Horton

New York University (NYU) - Department of Information, Operations, and Management Sciences

Joseph Golden

Collage.com

Multiple version iconThere are 2 versions of this paper

Date Written: March 8, 2018

Abstract

A solution to marketplace information asymmetries is to have trading partners publicly rate each other post-transaction. Many have shown these ratings are effective; we show that their effectiveness deteriorates over time. The problem is that ratings are prone to inflation, with raters feeling pressure to leave "above average'' ratings, which in turn pushes the average higher. This pressure stems from raters' desire to not harm the rated seller. As the potential to harm is what makes ratings effective, reputation systems, as currently designed, sow the seeds of their own irrelevance.

Keywords: online platforms, reputation systems, inflation, computational social science

Suggested Citation

Filippas, Apostolos and Horton, John J. and Golden, Joseph, Reputation Inflation (March 8, 2018). Available at SSRN: https://ssrn.com/abstract=3136473 or http://dx.doi.org/10.2139/ssrn.3136473

Apostolos Filippas (Contact Author)

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States

John J. Horton

New York University (NYU) - Department of Information, Operations, and Management Sciences ( email )

44 West Fourth Street
New York, NY 10012
United States
6175952437 (Phone)

HOME PAGE: http://john-joseph-horton.com

Joseph Golden

Collage.com ( email )

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