Reputation Economies in Cyberspace

Reputation, which plays a key role in almost any economic or social system, is a fundamental, but not well understood, aspect of online business transactions, peer production of information and knowledge, and exchanges within virtual social communities. Traditional modes of authentication, accreditation, reputation, and prior acquaintance with participants rely on the social norms of close-knit communities and the accountability of meeting face to face. Since these mechanisms usually do not apply to online environments, we have witnessed the development of alternative models for reputation management including third-party certificate authorities, peer-produced evaluations, ratings, stars, points, karma and others.

These new models, which apply to businesses, community-mediated information sources, people, goods, and services, challenge our accepted notions of identity, social capital, accreditation, expertise, and risk as they shift the reliance of reputation systems away from traditional business and social networks, educational backgrounds and institutional affiliations and towards the wisdom of the crowd. This shift, in turn, entails dramatic changes to information privacy, information quality, ownership and the ability of groups and individuals to affect these issues. Technology-mediated, cyber-reputation management is based on transactions in information that are often sensitive and always contextual. The data and information that are collected in online reputation systems are both valuable and powerful. The ability to control this information, store it, process it, access it, and transport it, are crucial to the maintenance of the reputation economy.