Reputation Mechanisms and the Civics Economy

In my Network Economics class, we’ve been talking about the “sharing economy” (or, arguably, the “so-called sharing economy”). Companies like Uber, AirBnB, even Ebay and the 3rd party seller mechanism of Amazon. While these companies arguably open the door for regulation loopholes and worker exploitation, in their purest, ideal, form, they allow “average people” to benefit from their unused resources: people can make some extra money driving strangers, hosting strangers, or selling miscellaneous items to strangers. In return, other average people can get rides, places to stay, or miscellaneous items.

Personally, I have a lot of questions and skepticism around the “sharing economy,” but that debate isn’t the point of my post today.

One of the core ideas that supports the sharing economy is a reputation system. The sharing economy wouldn’t work without it. It takes trust to get into a stranger’s car, stay in a stranger’s house, or send money to a stranger – and that trust is generated by a reputation system.

These markets are able facilitate exchange between strangers because participants in the system have a reputation – and upholding that reputation is worth more then the temporary gain of ripping someone off.

To be clear, reputation systems aren’t anything new – you trust a bank because it’s FDIC insured, you trust a hotel because it has a certain star-rating, and you trust a company because it, too, has a reputation to maintain in the broader market.

But what’s interesting about the modern reputation systems is that they tend to me much more individual. It is not institutions or brands earning your trust, but real, individual people.

In theory, a service like AirBnB doesn’t even have to be about monetary exchange – with a solid reputation system in place, people could use it as a place to earn and spend hosting credits, or to otherwise barter for a cheap place to stay.

Fundamentally, a reputation system is a way to quickly establish trust between people who wouldn’t otherwise have the personal history required for a trusting relationship.

Regardless of how you feel about the impacts of the sharing economy, I find this particular mechanism fascinating. And, as I am so often inclined to do, that interest immediate makes me wonder: what would this look like in a civic system?

That question could go in a lot of different directions, it it’s interesting to think about how such a system might play out:

A reputation system for good deliberators; where people who listen and provide rational arguments are rated highly while trolls are pushed to the margins.

A reputation system for urban developers; where developers who genuinely listen to community input are rated highlight and those just looking for profit are down rated.

A reputation system for every day, neighborly interactions: don’t know your neighbors but need to borrow a cup of sugar? Find out who in your neighborhood doesn’t mind being asked. …Do people still borrow a cup of sugar from their neighbors? I imagine not because people don’t know their neighbors and don’t know who to ask.

I can imagine other sorts of reputation systems which spill into the sharing economy as it exists today: a reputation system for finding a place to crash or getting a ride from the airport. These systems have the dangerous potential to turn into little more than corporate scheming to evade regulation – but taking primarily as a reputation system with a civic mission, it seems like such organization could have beneficial potential.

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