Re: towards a theory of reputation

At 01:14 PM 11/21/95 -0800, Wei Dai wrote:
> The first step toward a theory of reputation is defining what reputation 
> is.  [...]  If these interactions are mainly economic in nature, 
> then we can represent Alice's reputation of Bob by a graph with 
> the horizontal axis labeled price and the vertical axis labeled 
> expected utility. 

Any attempt to discuss and analyze reputations using
morally neutral language is bound to wind up as boring long
winded meaningless complicated word salad.

You will wind up in the same place as the behaviorists did,
going in ever diminishing epistemological circles until you
vanish into the whichness of why and the whyness of which.

Some things, for example reputations, behavior, or the 
principle of mathematical induction, necessarily involve 
concepts that are philosophically problematical.   Any attempt
to discuss these things while avoiding philosophically
problematic concepts invariably degenerates into total fog.


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On Mon, 20 Nov 1995, James A. Donald wrote:

> Any attempt to discuss and analyze reputations using
> morally neutral language is bound to wind up as boring long
> winded meaningless complicated word salad.

I don't understand what you mean by this.  Can you give an example to how 
to discuss reputation (i.e., the concept of reputation, not a particular 
reputation) using morally non-neutral language?

William J. Halverson wrote:

> What is the differnece between 'reputation' and 'value'?

When we say the value of some object, we implicitely assume that the 
quality of the information we used to evaluate the object is good enough 
that we don't have to deal with uncertainty.  When we speak of reputation 
however, we explicitely assume that we have less than perfect information 
and that uncertainties must be dealt with.  We normally speak of value of 
objects and reputation of entities, because information about objects are 
usually easier to obtain than information about entities.

> Why quantify it?  If Bob's advertising/testimonials are successful,
> he may not even have a 'reputation' because only insiders know
> about him.

Quantification is an abstraction that sometimes allows one to think about 
a concept more clearly.  You decide whether this is the case for 
reputation.

I don't completely understand your second sentence.  Only people who know 
that Bob exists has a reputation of him, so if only insiders know he 
exists, his reputation consists of the insiders' reputations of him.

Wei Dai

This discussion puzzles me.  I thought we were bombarded with 
reputational goods all the time:  brand names, stocks (what is a purchase 
in the 2ndary market but a purchase of reputation most of the time?), 
degrees from famous universities.  Anonymity compliates matters only if 
no systems of unique ID is used.  Throw in digital signatures and we are 
back at brand names, aren't we?

A. Michael Froomkin        | +1 (305) 284-4285; +1 (305) 284-6506 (fax)
Associate Professor of Law | 
U. Miami School of Law     | froomkin@law.miami.edu
P.O. Box 248087            | http://www.law.miami.edu/~froomkin
Coral Gables, FL 33124 USA | It's warm here.

On Wed, 22 Nov 1995, Michael Froomkin wrote:

> This discussion puzzles me.  I thought we were bombarded with 
> reputational goods all the time:  brand names, stocks (what is a purchase 
> in the 2ndary market but a purchase of reputation most of the time?), 
> degrees from famous universities.  Anonymity compliates matters only if 
> no systems of unique ID is used.  Throw in digital signatures and we are 
> back at brand names, aren't we?

It's true that we deal routinely with reputations now.
However there is very little formal analysis of reputation as a concept.  
Although our common sense knowledge of reputations seem to serve 
us fairly well(*), there is no guarantee that it will scale well to an 
anonymous market where both the number of participants and the importance 
of reputation are much higher.

* However, the government apparently doesn't think so.  Witness the FDA and 
the SEC.

We need to have formal algorithms to deal with reputations, and we need 
to be able to show that they have desirable properties.  This will reduce 
transaction costs and help bring anonymous markets into the mainstream.  
Perhaps more importantly, good reputation algorithms will make 
agorics computing possible.  There is a very interesting proposal for a 
network routing system based on microcurrency and positive reputations 
(see http://www.webcom.com/agorics/dsr.html).  However it does not say 
what algorithms will be used to handle reputations.  If the system is 
actually implemented, its proper functioning will depend as much on the 
properties of the reputation algorithms used as on the correctness of its 
protocols.

Wei Dai