The Pebble and the Avalanche

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Current Revolutions in Business and Technology

by Dr. Moshe Yudkowsky,

author of The Pebble and The Avalanche: How Taking Things Apart Creates Revolutions

 

Tue, 2006-Dec-19, 08:14

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Making Your Reputation on eBay

An excellent reputation on eBay adds significant profits to sellers, so it's not surprising the unscrupulous individuals will try to find a way to boost their reputation. Brown and Morgan of UC Berkeley published research that shows how a "market" for reputations sprang up on eBay. A series of transactions for just one cent generates positive feeback; that positive feedback enhances the reputation of each buyer and seller. I find it interesting that a cooperative market to artificially enhance reputations emerged from nowhere; who says thieves have no honor?

Brown and Morgan suggest that the problem of artificial reputations can be solved in part by assigning different contributions to a reputation based on the dollar value of the transaction. I'd like to go a step further and suggest disaggregating reputation scores based on the value of the transaction. Brown and Morgan cite the case of thelandseller, who applied a reputation gained in penny sales to real-estate transactions that cost over ten thousands dollars each. If a potential buyer knew, through a disaggregated reputation that showed reputations in each price range, that thelandseller's excellent initial reputation was based entirely on penny sales, perhaps buyers would exercise more diligence.

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