The impact of fraud on reputation systems

Jan Philipp Krügel and Fabian Paetzel

Games and Economic Behavior, 2024, vol. 144, issue C, 329-354

Abstract: Reputation systems can mitigate opportunistic behavior and improve efficiency on online marketplaces. However, rating fraud is a major problem on many websites. We experimentally investigate the circumstances under which rating fraud undermines the functioning of a reputation system and reduces efficiency. We find that the ability to manipulate feedback received from others generally reduces the reliability of displayed ratings compared to a control treatment where rating fraud is not possible. When manipulation is possible and costless, rating fraud is widespread, ratings become less reliable, expectations are lower, and efficiency is significantly reduced. However, when there is a cost to manipulation, there is less fraud, ratings are more reliable and efficiency increases, even when the cost is comparatively low.

Keywords: Reputation systems; Rating fraud; Reliability of ratings; Efficiency (search for similar items in EconPapers)
JEL-codes: C72 C91 D83 L14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825624000149
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:144:y:2024:i:c:p:329-354

DOI: 10.1016/j.geb.2024.01.013

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().