The role of decision confidence in advice-taking and trust formation

In a world where ideas flow freely between people across multiple platforms, we often find ourselves relying on others' information without an objective standard to judge whether those opinions are accurate. The present study tests an agreement-in-confidence hypothesis of advice perception, which holds that internal metacognitive evaluations of decision confidence play an important functional role in the perception and use of social information, such as peers' advice. We propose that confidence can be used, computationally, to estimate advisors' trustworthiness and advice reliability. Specifically, these processes are hypothesized to be particularly important in situations where objective feedback is absent or difficult to acquire. Here, we use a judge-advisor system paradigm to precisely manipulate the profiles of virtual advisors whose opinions are provided to participants performing a perceptual decision making task. We find that when advisors' and participants' judgments are independent, people are able to discriminate subtle advice features, like confidence calibration, whether or not objective feedback is available. However, when observers' judgments (and judgment errors) are correlated - as is the case in many social contexts - predictable distortions can be observed between feedback and feedback-free scenarios. A simple model of advice reliability estimation, endowed with metacognitive insight, is able to explain key patterns of results observed in the human data. We use agent-based modeling to explore implications of these individual-level decision strategies for network-level patterns of trust and belief formation

Enhanced Reputation Scoring for Online Auctions

To handle the uncertainty inherent in eCommerce transactions, reputation systems have emerged as a way to represent reliability and develop trust between transaction participants. Despite the value added by reputation systems, limitations of existent systems remain (Malaga 2001). We empirically test Porter et al.’s (2004) reputation scoring procedure, which was designed to address the shortcomings of current systems. This study uses computer simulation to replicate the auction process between buyers and sellers with reputation scores calculated using both the Porter et al. model and the eBay auction model. Results from the two models are then analyzed to show that the Porter et al. model more accurately estimates reputation scores

Reputation Failure: The Limits of Market Discipline in Consumer Markets

Many believe that consumersourced reputational information about products would increasingly replace topdown regulation Instead of protecting consumers through coercive laws reputational information gleaned from the wisdom of the crowd would guide consumer decision making There is now a growing pressure to deregulate in diverse fields such as contracts products liability consumer protection and occupational licensingbrbrThis Article presents a common failure mode of systems of reputation Reputation Failure By spotlighting the publicgood nature of reviews rankings and even gossip this Article shows the mismatch between the private incentives consumers have to create reputational information and its social value As a result of this divergence reputational information is beset by participation selection and social desirability biases that systematically distort it The Article argues that these distortions are inherent to most systems of reputation and that they make reputation far less reliable than traditionally understoodbrbrThe limits of reputation highlight the centrality of the law to the future of the marketplace Proper legal institutions can deal not only with the symptoms of reputation failure ” consumer mistakes ” but improve the flow and quality of reputational information thus correcting reputation failures before they arise The Article offers a general framework and explores a number of strategies A more robust system of reputation can preserve consumer autonomy without sacrificing consumer welfar

Alternatives to Peer Review: Novel Approaches for Research Evaluation

In this paper we review several novel approaches for research evaluation. We start with a brief overview of the peer review, its controversies, and metrics for assessing efficiency and overall quality of the peer review. We then discuss five approaches, including reputation-based ones, that come out of the research carried out by the LiquidPub project and research groups collaborated with LiquidPub. Those approaches are alternative or complementary to traditional peer review. We discuss pros and cons of the proposed approaches and conclude with a vision for the future of the research evaluation, arguing that no single system can suit all stakeholders in various communities

Peering into Peer Review

This article examines the social mechanisms behind peer review and provides a complementary view to Mich\ue8le Lamont\u2019s book, How Professors Think. It emphasizes the need for outlook review of the entire process of evaluation in science in more general terms and suggests the added value of modelling to investigate it. It introduces experimental findings on the relevance of social sanctions and the counter-productive effect of economic incentives on peer review that can support the recent debate about its reform. It illustrates the relevance of reputational incentives to guarantee cooperation between the different figures involved in the evaluation process

Trust and Experience in Online Auctions

This paper aims to shed light on the complexities and difficulties in predicting the effects of trust and the experience of online auction participants on bid levels in online auctions. To provide some insights into learning by bidders, a field study was conducted first to examine auction and bidder characteristics from eBay auctions of rare coins. We proposed that such learning is partly because of institutional-based trust. Data were then gathered from 453 participants in an online experiment and survey, and a structural equation model was used to analyze the results. This paper reveals that experience has a nonmonotonic effect on the levels of online auction bids. Contrary to previous research on traditional auctions, as online auction bidders gain more experience, their level of institutional-based trust increases and leads to higher bid levels. Data also show that both a bidder’s selling and bidding experiences increase bid levels, with the selling experience having a somewhat stronger effect. This paper offers an in-depth study that examines the effects of experience and learning and bid levels in online auctions. We postulate this learning is because of institutional-based trust. Although personal trust in sellers has received a significant amount of research attention, this paper addresses an important gap in the literature by focusing on institutional-based trust