Rate This Transaction : Coordinating Mappings in Market Feedback Systems

Reputation feedback systems assign feedback scores to traders with the aim of separating them according to reliability. The objective is enforcing trustworthiness, and thereby creating trust among the traders. Little is known about the proper design of these systems. We show how the informativeness of feedback scores depends on the ability of the system to solve a coordination problem such that traders use a common mapping to turn experiences into ratings. The analysis provides guidance for designing the feedback elicitation mechanisms. To test efficacy, we set up a prototype market in which buyers give ratings, enabling a sharp comparison of the informativeness (entropy) of commonly employed elicitation mechanisms. While no mechanism reaches the theoretical optimum, we find substantial benefits in terms of informativeness of tailoring elicitation questions and feedback scaling to the specific reliability problem in the market. Open ended questions and scales that do not naturally map on to the reliability problem yield less informative feedback. Analysis of trader feedback behavior suggests that the key to informativeness is choosing elicitation cues that align the desired feedback with cognitive process fluency