Chapter 7: Building Trust Online: The Design of Robust Reputation Reporting Mechanisms for Online Trading Communities | Social and Economic Transformation in the Digital Era

Chrysanthos Dellarocas
Massachusetts Institute of Technology, USA

Abstract

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