What is Reputation?

That is a big question and there are a number of key points to address.

Reputation Enables Decision Making

Reputation is the main force that enables us to get decisions of any kind. Decisions like buying a product, hiring a new tradesman, investing in company stocks or even meeting a partner.

Reputation is Complex

Someone’s reputation is made up of so many elements, including their personality, morals, character, which are not fixed, but fluid. Building a reputation system online has always been more complicated for a few reasons. But before getting into this, let’s try to understand the elements that make up reputation.

Reputation is always earned within a context. Objects and people both have reputation but their reputation are measured differently.

Reputation is information that helps us to evaluate a person, place or object.

But where does this Information come from?

Reputation is not a result of a direct experience you have with someone, it’s information you receive from a third party that you either know or don’t know.

The experience person x has with person y will have a significant influence on the decision that person z makes with person y.

What kind of third party are we talking about ?

Third parties make statements about experiences, we call these reputation statements.

Types of reputation statements:

A binary judgment, like if an experience is worth pursuing or not. A rank, which rates how much effort should be invested into an experience. An opinion, like what one thinks about an experience. An endorsement in action, For example: ‘All my friends bought this experience’

What is considered to be the most valuable reputation statement?

An endorsement in action

Here are some examples of an endorsement in action:

A statistical fact, for example: sales An award or prize. An action that a person has taken in order to collaborate with the same person or company.

The Two Types of Reputation Statements

Explicit

When someone talks about an experience or when someone voices their opinion about an experience.

Implicit

An action that was taken. When people are taking action to for example: Buy a product, collaborate or endorse a company / person.

Three Questions to Ask in Order to Build a Good Reputation System :

Who do we want to give the reputation to? Who do we want to get the reputation statements from and why? What are the type of reputation statements do we want to obtain?

Two Types of Reputation

Local Reputation

When people that are closely connected to each other can judge each other on a specific context.

Example: “That father never took care of his son” or “This pizza is the best in town”. This type of reputation enables people to make quicker decisions on what to do or who to deal with in a given situation.

The problem with local reputation is that it’s local and very limited to the closed network that surrounds a person / within neighbourhood, inner friendship circle etc… Your neighbour knows how you tidy you keep your garden but will not be exposed to knowing about your reputation in other aspects of your life.

Global Reputation

Your reputation that is spoken of from strangers outside of your close network is called Global Reputation.

The main difference between local and global reputation is the source of the information. Global reputation is less effective way of measuring reputation than local but we use global reputation as it’s the only method we have to measure an experience with an entity.

The interesting part here is that if one is able to create a local (based on trust) reputation system that can scale, this would be considered the most effective reputation system that ever existed.