Achieving Honest Ratings with Reputation-Based Fines in Electronic Markets

—The effectiveness of online feedback mechanisms for rating the performance of providers in electronic markets is vulnerable to the submission of dishonest ratings. In this paper, we deal with how to elicit honest such ratings in a competitive electronic market where each participant can occasionally act both as provider and as client. We assume that each service provision is rated by both parties involved; only upon agreement, this rating is included in the calculation of reputation for the provider’s performance. We first study as a single-shot game the effectiveness of inducing, upon evidence of lying (i.e. disagreement of the submitted feedback), fixed fines to both transacted parties, yet different ones for the provider and the client. We prove that the submission of honest feedback can be a stable equilibrium for the whole market under certain initial system conditions. Then, we refine our game-model for repeated transactions and calculate proper different reputation-base...

• Type: Conference
• Year: 2008
• Where: INFOCOM
• Authors: Thanasis G. Papaioannou, George D. Stamoulis
• Keywords: Communications, Electronic Markets, Honest Feedback, INFOCOM 2008, Online Feedback Mechanisms