SEK210, 2/F, Simon & Eleanor Kwok Building
14:00 - 15:30
About the Seminar
Online anonymity has posed a significant threat on online reputation mechanisms and online identity management. How to improve the reliability and effectiveness of online reputation has thus become an important question of theoretical and practical interest. We examine a reputation market in an infinite repeated game setting, where agents sell online services and trade their online reputations. Agents exert effort to provide services and high type agents have a lower cost of effort than low types. An auditor performs random checks on services and determines agents’ reputations. Our analysis depicts a full equilibrium in the reputation system with audit, including separating, partial separating, and pooling equilibrium under different conditions. In particular, we show that full separation can arise as equilibrium such that high-type agents can be sorted out from low-type agents by their reputations, which is in contrast to Tadelis (2002). In a separating equilibrium, reputations become a perfect indicator of agents’ type effort levels, and quality of the services. By proposing online reputations as an asset, our paper generates implication for establishing reliable online environments and promoting online interactions.
Hong Xu is an Assistant Professor of Information Systems, Business Statistics and Operations Management at the Hong Kong University of Science and Technology. She holds a Ph.D. of Information System from the University of Texas at Austin. Her research interest lies at the intersection of economics and information systems. Her research portfolio consists of issues related to (i) the economics of online reputations; (ii) the impact of design of auditing mechanisms in online and offline settings. The main objective of her research is to provide normative guidelines to online communities holders so that they can effectively manage the online environment and establish an efficient and reliable community.
Xu, H. (2012, June). Online identity management and tradable reputation. Academic seminar presented at Lingnan University, Hong Kong.