Effects of Positive Reputation Systems

doi:10.1006/ssre.1999.0663

Social Science Research

Volume 29, Issue 2, June 2000, Pages 188-207

https://doi.org/10.1006/ssre.1999.0663 Get rights and content

Abstract

For a given population of potential trustees—actors or objects in whom others may seek to place trust—a positive reputation system is a formalized or institutionalized procedure or process by which a particular positive reputation is acquired or lost. Positive reputation systems are common in modern society. Examples include awarding of certifications, awards, credentials, and positive reviews. This study mathematically derives effects of two general characteristics of such systems—how easy it is to get a reputation and how effective the reputation is at discriminating between cooperators and noncooperators—in the context of a third factor, the proportion of cooperators in the population. Some findings are as follows. The gain in confidence from a potential trustee having a reputation is a U-shaped function of reputation ease, with maximum depending on proportion of cooperators in the population. For potential trustees with a positive reputation, and trustors seeking and able to make deals with a limited number of trustees with positive reputations, the reputation is worth more the harder it is to get. However, when reputation effectiveness is moderate to high, the worth of a potential trustee with a positive reputation compared to the worth of a potential trustee without one becomes maximal when reputation is easy. The study also suggests a way to model continuous positive reputation systems—ones in which positive reputations are acquired gradually, as through amassing references.

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Cited by (38)

What is known about personal reputation? A systematic literature review
2023, Heliyon
This systematic literature review encompassed the results of previous research on personal reputation and found opportunities in state of the literature to guide future research in communication, management, and other disciplines in the social sciences. A content analysis was conducted of 91 manuscripts from 1984 to November 2022, following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines. The findings suggest that the amount of literature on personal reputation has increased since 2006; however, it is still in a developing stage. Due to its scarcity, it is advisable to conduct more qualitative and probability studies. For this review, several of the most cited articles are probably pioneering manuscripts that contributed to building the personal reputation construct. This review establishes a total of six categories for guiding future research opportunities on personal reputation. To facilitate the classification of the different future research opportunities, some types of areas suggested by Gomez-Trujillo et al. were considered. The discussion of future research opportunities includes categories like Causes and Effects, Inventories and Scales, Online and Digital Context, Organizational and Group Environments, Leaders and Top Management Executives, and Theory-building. On the other hand, this study could be considered the first step towards future research on how personal reputation influences audiences' opinions and perceptions in different research fields. It also opens the possibility of conducting more specific systematic literature reviews on this topic. Finally, this manuscript offers an overview of the present and the future of construct of personal reputation in the social sciences.
Group social capital and lending outcomes in the financial credit market: An empirical study of online peer-to-peer lending
2016, Electronic Commerce Research and Applications
Citation Excerpt :
In addition, the group leaders also cherish the group reputation since it is an important asset in his/her own right (Lord and Maher 2002). Nevertheless, positive reputations are acquired gradually over time (Whitmeyer 2000), and individuals’ behavior exhibits significant time lag in the face of institutional change (Welter and Smallbone 2011), so the group rating policy may not produce an immediate effect. Thus, we expected that the group leader reward would have a positive impact on the default probability, and the group rating would gradually reduce group member’s default probability by promoting members’ conformity, peer monitoring, and peer-pressure.
We studied the relationship between individuals’ group social capital and their lending outcomes in the online peer-to-peer financial credit market, where individual lenders make direct unsecured microloans to other individual borrowers. Despite its ability to facilitate economic exchange, social capital as public goods may also cause free-rider problems, particularly in an online environment. Based on the analyses of transaction data collected from one of the largest online peer-to-peer lending platform in the U.S., we found that the borrower’s general group social capital (i.e., group membership) and relational social capital (i.e., group credibility and verifiability, and group trust) yielded inconsistent effects, and the borrower’s structural social capital (i.e., group inclusiveness) had a negative impact on, his/her funding and repayment performance. We discuss the implications of our findings for reconciling two major but conflicting theoretical views of social capital and for improving institutional mechanism design in a decentralized online financial credit market.
Reputation systems, aggression, and deterrence in social interaction
2013, Social Science Research
Citation Excerpt :
These scholars have used the concept of reputation in one of two ways, one relatively narrow and the other relatively broad. The narrow conception focuses the inferences individuals make about other actors based strictly on those actors’ past behaviors (Grief, 1989; Nowak and Sigmund, 2005; Raub and Weesie, 1990; Resnick et al., 2000; Whitmeyer, 2000). The broad conception focuses on more diffuse inferences, based not only on behavior, but also on factors such as family background and social network composition (Podolny, 2005).
Why do individuals sometimes pursue apparently senseless aggression, whether on the street, in court, at work, or in politics? Past work converges on the idea that individuals do so to establish social rank and deter prospective challengers. However, the fundamental claims of this argument – that concerns for one’s reputation cause individuals to behave aggressively, and that a reputation for aggression deters threats from others – remain controversial. This paper offers a theoretical argument linking concern for reputation to aggressive behavior and deterrence. The theory argues that in competitive interactions, determining one’s likelihood of prevailing in conflict (“competitive ability”) is crucial for deciding whether to pursue conflict, but also rife with uncertainty. This motivates individuals to engage in aggressive behavior to signal to others (perhaps falsely) that they are strong competitors. Two behavioral experiments test this argument, and find that reputation systems motivate aggressive behavior, competitive ability moderates this effect, and reputations for aggressive behavior deter aggression from others. The results contribute to understanding the role reputation systems play in the social organization of aggressive behavior.
A Reciprocal Influence Model of Social Power: Emerging Principles and Lines of Inquiry
2008, Advances in Experimental Social Psychology
Citation Excerpt :
Distributive reputation refers to the information about a group member that is stored throughout the group. Distributive reputation is not actively shared, but is accessible by simply inquiring about a group member (Whitmeyer, 2000). Discursive reputation emerges in active, face‐to‐face communication amongst group members, in such processes as gossip (Ben‐Ze'ev, 1994; Dunbar, 2004; Emler, 1994), teasing (Keltner et al., 2001), and pleasant idle chat.
In the present chapter, we advance a reciprocal influence model of social power. Our model is rooted in evolutionist analyses of primate hierarchies, and notions that the capacity for subordinates to form alliances imposes important demands upon those in power, and that power heuristically reduces the likelihood of conflicts within groups. Guided by these assumptions, we posit a set of propositions regarding the reciprocal nature of power, and review recent supporting data. With respect to the acquisition of social power, we show that power is afforded to those individuals and strategic behaviors related to advancing the interests of the group. With respect to constraints upon power, we detail how group‐based representations (a fellow group member's reputation), communication (gossip), and self‐assessments (an individual's modest sense of power) constrain the actions of those in power according to how they advance group interests. Finally, with respect to the notion that power acts as a social interaction heuristic, we examine how social power is readily and accurately perceived by group members and gives priority to the emotions, goals, and actions of high‐power individuals in shaping interdependent action. We conclude with a discussion of recent studies of the subjective sense of power and class‐based ideologies.
Design and the management of multi-institutional research collaborations: Theoretical implications from two case studies
2006, Research Policy
Over the past three decades, U.S. science and technology funding agencies have increasingly supported large-scale, centralized, block grant-based research projects that often span multiple disciplines and institutions. This trend has developed at such a rate that research focused on understanding the management of these new collaborative models has largely not kept pace. We use two case studies of large-scale, multi-disciplinary collaborations to develop an institutional framework that illuminates the relationships among (a) the epistemic norms of the disciplines represented in the collaboration, (b) the organizational structure of these collaborations, and (c) the inter-institutional collaboration success.
The results of our case study analysis demonstrate that large-scale, multi-discipline, inter-institutional collaborations need a relatively high level of development in either (1) the epistemic development of the disciplines involved in the collaboration or (2) the organizational structure of the collaboration. We argue that the domain (i.e. epistemic or organizational) that provides the highest level of institutionalization is the one that organizes the “rules” of the collaboration.
Toward a Theory of Reputation in Organizations
2007, Research in Personnel and Human Resources Management
In everyday life, as well as in work organizations, we engage in frequent and quite comfortable discourse about the nature of reputations, and wealso see personal reputation used as a basis for important human resources decisions (e.g., promotions, terminations, etc.). Unfortunately, despite its recognized importance, there has been very little theory and research on personal reputation in organizations published in the organizational sciences. The present paper attempts to address this need by proposing a conceptualization of personal reputation in organizations. In this conceptualization, reputation is presented as an agreed upon, collective perception by others, and involves behavior calibration derived from social comparisons with referent others that results in a deviation from the behavioral norms in one's environment, as observed and evaluated by others. Implications of this conceptualization are discussed, as are directions for future research.

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^☆: This paper benefited from discussion with Murray Webster, Jr. and Rosemary Hopcroft, and from referees' comments.

^☆☆: Address correspondence and reprint requests to Joseph M. Whitmeyer, Department of Sociology, UNC—Charlotte, Charlotte, NC 28223. E-mail: [email protected].

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Regular ArticleEffects of Positive Reputation Systems☆,☆☆

Abstract

The Logic and Limits of Trust

Bayesian Theory

Trust and third-party gossip

Foundations of Social Theory

The Credential Society: An Historical Sociology of Education and Stratification

Decision Theory: An Introduction to the Mathematics of Rationality

Bringing the individual back in: A structural analysis of the internal market for reputation in organizations

Academy of Management Journal

The emergence of exchange structures: An experimental study of uncertainty, commitment, and trust

American Journal of Sociology

Trust in Organizations: Frontiers of Theory and Research

Regular Article
Effects of Positive Reputation Systems☆,☆☆