How - Dov Seidman [102]
Both of these fabulist visions find their roots at the real-life intersection of information technology and personal conduct. Reputation in the virtual world, the world of networked communication, can be calculated with exactitude. Computer science engineers rely on reputation systems to mathematically quantify trust in online communities. Everything from web site security to trading communities like eBay employs reputation-based computational models that evaluate behavior, calculate trust scores, and apply them to everything from security access to insurability. As more and more information about who we are and what we’ve done moves from the relatively safe confines of personal connections in semiclosed societies to the far more vast network of the Internet, our personal reputations begin to more closely resemble these abstract commercial ones. As the online world has a persistence of memory with no rival, HOW we do what we do—every day becomes far more important and integral to our ability to thrive.
Online, mathematical reputation systems, in fact, provide us with an interesting way of evaluating the value of reputation in life. Researchers at the University of Michigan and Harvard University conducted a study that aimed to do just that. First, they noted that in living, word-of-mouth reputational systems—the kind that work for or against us in business each day—much information is lost or omitted. Humans, as expressive as we are, are imperfect communication systems (ask anyone who ever played the game of “telephone” as a child). Online systems, like the one used on perhaps the most widely known application, eBay, forget nothing. Buyers and sellers on eBay rate each other with a feedback score and a short written comment. Not only does that score and comment remain forever, millions can access it for next to no expense (reputation on the Internet broadcasts your actions simultaneously to merchants in Beijing and housewives in Sweden).5 To evaluate the precise value of this eBay reputation, the researchers set out to discover just how much a good reputation was worth to sellers in an online marketplace, where the traditional signifiers of a seller’s reputation—the cost and appearance of a facility, longevity in a community, connection to known others—are absent. In cooperation with a known and respected dealer of collectible postcards, they sold identical lots of cards through the dealer’s high-reputation main identity and through other, newly created, identities that had low reputational scores. They found that buyers, on average, were willing to pay 8.1 percent more to a seller with a good reputation than to a seller without one, for identical merchandise.
The presence of positive reputation was directly quantifiable. Like trust, it is a soft thing we take for granted, which the new conditions of the world have suddenly rendered hard. Who among us couldn’t do with an 8 percent raise or an 8 percent premium for whatever we are selling?
REPUTATIONAL CAPITAL
Reputation comes in many forms. It can be, most obviously, the word-of-mouth messages that others receive and pass along about you. It can also be the proxies of your past achievements, like your resume or your past salary. Almost everyone can remember a time when, confronted with the knowledge of what someone they have just met earns or their previous job titles, responded with the thought “Wow, he sure doesn’t seem like a $X per year kind of guy.”
A friend of mine used to produce television commercials, an industry staffed mostly by freelancers paid day rates. As part of any particular job, he would routinely find himself hiring any number of staffers, from entry-level production assistants (PAs) to directors of photography (DPs), who came with a wide range of salary quotes. Staffs would form