Digital reputation and online opinion formation

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Giacomo Livan, Research Associate at University College London

Giacomo Livan, Research Associate at University College London (UCL), blogs about the importance of reputation and fairness in the shared economy

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Our digital interactions are increasingly organising into platforms where individuals can exchange knowledge, goods, and resources on a peer-to-peer (P2P) basis. Such platforms are epitomised by the digital marketplaces of the ‘sharing economy’, which has been brought to global attention by companies such as Airbnb and Uber. The sharing economy relies on establishing trust in distributed networks where ‘micro entrepreneurs’ and customers, often switching roles, build a reputation via a digital peer review process.

Given the expected growth of the P2P business paradigm [1], reputation will increasingly become a central part of our online lives, as it will grant or prevent access to substantial economic opportunities. Furthermore, as the number of different platforms increase, merging reputations developed in different contexts and broadcasting the aggregate across multiple social networks will soon become customary. Indeed, a few startup companies already provide their clients with portable reputation scores based on their online activity.

Being decentralised, P2P systems are often thought to promote more economic freedom and more democratisation. Yet, their current lack of regulation exposes them to a number of distortions. For instance, the ‘5-for-5’ practice of Uber drivers and passengers [2], i.e. agreeing on exchanging five star ratings at the end of a ride in order to mutually boost reputation, is a common firsthand experience of these issues.

If allowed to evolve uncritically, similar practices could erode user trust towards P2P platforms, and eventually compromise their fundamental contribution to future economic growth. It is therefore crucially important to build solid scientific knowledge that will clarify under what conditions P2P interactions will promote trust, efficiency, and, ultimately, social welfare in digital marketplaces.

Together with my colleagues at UCL, I have recently started looking at P2P platforms from a cross-disciplinary point of view, combining methods from physics with ideas from economics. Some of our work in progress is currently devoted to studying ‘alternate realities’ of P2P platforms: we investigate whether the reputations we observe are peculiar to the actual platforms, and, if not, what other patterns of interactions between the users could have produced them.

What we found so far is quite distant from the ideal of fairness that P2P platforms are often associated with: overall reputation is produced by means of an exceedingly large rating reciprocity (as in the above ‘5 for 5’ example) and through preferential relationships between groups of users.

Our preliminary results show that unconventional approaches to the P2P world can lead to unexpected discoveries, and we are confident that improving upon them will eventually deliver accurate answers to some of the most pressing research questions that revolve around it. How do individuals form opinions about others in a platform? Can online reputation be measured in a fair and unbiased way? How does trust emerge and collapse in a distributed environment? Providing solutions to these questions will ultimately empower users to take better control of their lives in the complex digital environment we live in.

References:
[1] http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy.html
[2] http://www.nytimes.com/2015/05/24/opinion/sunday/maureen-dowd-driving-uber-mad.html

Giacomo Livan is Research Associate at University College London. You can follow him on Twitter @giacomolivan. You can keep up to speed with all things PD&TN related by following the hashtag #PDTN.

Interested in this topic? Why not sign up to our Online Reputation and Opinion Formation event taking place at the Digital Catapult Centre in London on 22 April – we’d love to see you there!