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March 16, 2007
Fleeting - and faked - reputation
Reputation can be one of the most enduring - and the most fleeting - of intangibles. It is also one of the easiest to fake. The "confidence game" has been practices for all of human history. And it is part of the Internet system, as we are all aware every time we check our e-mail. In the digital age, the con has taken a new twist on an old game - use the victims strengthens against themselves - as the Washington Post explains (The Ol' Bait and Click):
But users have repeatedly found ways to inflate or wholly fabricate their reputations. The online encyclopedia, Wikipedia, was thrown into turmoil late last month after users learned that one of the site's major editors was not a tenured university religion professor as he claimed in his online profile but a 24-year-old college dropout. At Amazon, a computer glitch three years ago inadvertently exposed the real names of reviewers writing under pseudonyms. Some turned out not to be disinterested literary judges but authors giving their own books glowing reviews to boost sales.
The scams take countless and ever more ingenious forms. These include intimidating other users who give negative ratings by threatening to retaliate with negative feedback of their own. Some con artists also create false secondary accounts, known as "sock puppets," that a cheat can use to give himself fake positive feedback. It also includes piling up legitimate positive reviews and then closing in for the kill as an eBay seller from New Jersey called "malkilots" did to nearly three dozen would-be camera buyers, including the bidder from Georgia.
According to the story, "malkilots" sold hundreds of $20 memory cards to gain an excellent reputation, then switch to selling expensive camera's that never arrived. And this was not an isolated instance:
John Morgan, a business professor at the University of California at Berkeley, said his research found that 526 eBay sellers posted more than 6,500 listings on the site during the second half of 2005 for low-priced or seemingly valueless items in an apparent bid to inflate their feedback reputations.
"Such a listing makes no economic sense unless the seller is trying to increase his feedback rating," he said.
Morgan and co-author Jennifer Brown found one vendor called "thelandseller" who posted 304 such listings -- offering to sell a riddle in return for a penny and positive feedback. Then, with his inflated rating, "thelandseller" went on to try selling several undeveloped pieces of property in the southern United States whose starting bid prices were in the thousands of dollars.
With the amplifying power of advanced information and communications technology, a simple con can rake in a lot. And with "reputation systems" replacing face-to-face interactions, the game gets much more technical. It also creates new demand for "reputation protectors":
While sites like eBay and Amazon use ratings to help conduct commerce, a new start-up called Rapleaf is a general Web site devoted to tracking people's reputations and trustworthiness on and off the Internet. Auren Hoffman, Rapleaf's chief executive, said the site weaves together different types of information about individuals, making it more difficult for cheats to game his system. But he expects them to keep trying.
"Fraudsters get more sophisticated," he said. "It's always an arms race."
That should be a warning to others who are setting up on-line exchanges. For example, the Patent Office is already working on ways to protect the integrity of their pilot open patent review system (see earlier posting). I hope they build in a strong reputation checking system. With the stakes in patent claims growing higher, the incentives to con the system will only increase.
Posted by Ken Jarboe at March 16, 2007 8:42 AM
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