Reputational Information: A Research Agenda

Privacy and Security and Networks, the Internet, and Cloud Computing

Article Snapshot


Eric Goldman


GMU/Microsoft Conference on the Law & Economics of Innovation, May 8, 2009


This paper looks at how people and firms use information about reputation.

Policy Relevance

Many Internet-based systems for distribution information about reputation are new, and some problems might arise that might be helped by regulation.

Main Points

  • “Reputation” is usually defined as what others think of one.

  • In unmediated reputation systems, such as word-of-mouth recommendations, the users and producers of information about reputation communicate directly. In mediated systems like eBay’s feedback forum, a third party mediates the communication of information.

  • Sharing reputation information helps us identify good and bad actors to do business or trade with.

  • Some systems, like the credit reporting system, are heavily regulated, but others are not.
    • Some laws try to immunize purveyors of reputation information from liability for false or defamatory reports.

  • Problems that regulation might help to solve include gaming the system by filing favorable reports about yourself or unfavorable ones about a rival, and the question of whether to allow someone to reply to unfavorable reviews.
  • Because consumers have so much information about their experiences that they do not choose to reveal, the market might under-produce reputation information. Some sellers ask buyers not to review their product in the purchase contract.
  • Some reputation information might be unreliable and lead to bad decisions.

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