Abstracts

Dellarocas, Chris. The Digitization of Word-of-Mouth: Promise and Challenges of Online Reputation Mechanisms.. Working paper. [added Feb 08, 03]

Abstract: Online reputation mechanisms harness the bi-directional communication capabilities of the Internet in order to engineer large-scale word-of-mouth networks. They are emerging as a promising alternative to more established assurance mechanisms, such as branding and formal contracting, in a variety of settings ranging from online marketplaces to Internet search engines. At the same time, they are transforming a concept that had traditionally fallen within the realm of the social sciences into an engineering design problem. This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms represent. It discusses some important dimensions in which Internet-based reputation mechanisms differ from traditional word-of-mouth networks and surveys the most important issues related to designing, evaluating and using them. It provides an overview of relevant work in game theory and economics on the topic or reputation. It further discusses how this body of work is being extended and combined with insights from computer science, information systems, management science and psychology in order to take into consideration the special properties of online mechanisms such as their unprecedented scalability, the ability to precisely design the type of feedback information they solicit and distribute, and challenges associated with the volatility of identities and the absence of many familiar contextual cues in online environments.