The value of bad ratings: An experiment on the impact of distortions in reputation systems

Claudia Keser and Maximilian Späth

No 389, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We study the robustness of reputation management systems against distortions in rating behavior. In a laboratory trust experiment with reputation management, we mimic a positive bias by exclusively offering the option to rate positively or to give no rating. As predicted by theoretical considerations, this bias leads to significantly less trust than a system that additionally offers a negative rating option. A system relying solely on negative ratings does not have such an adverse effect. This highlights the importance of negative ratings for the effectiveness of reputation systems.

Keywords: Trust; Trustworthiness; Reputation System; Experiment (search for similar items in EconPapers)
JEL-codes: C73 C91 L14 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-exp and nep-soc
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:389

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