Category: reputation

Reputation badges as a driver for benevolent behavior

I’ve had a couple travel hours today to continue my reading of Richard Alexander’s The Biology of Moral Systems. The essential thesis of the book is that our moral, benevolent behaviors are motivated by our desire to receive indirectly reciprocal benevolent behaviors from others in a way that maximize the reproduction of our genetic capital. “Indirect” means that we may not get the reciprocal behavior from the same individual as the one we originally were benevolent to. There is another indirection since we may not even ourselves get the reciprocal behavior, but it might be given to our descendants or relatives. As Jean told me a few months ago, we might want to call this “slow reciprocity”.

In other words, we are acting morally and being benevolent to others, sometimes making this moral behaviors into law because it will serve the reproduction of our genes. For instance, monogamy rule limits competition between males, which maximizes every male’s chance to reproduce.

Another example are empirical evidences that social recognition of donations is an important incentive in pro-social activities, as if we cared about talking about our donations/moral behaviors in return for reputability and ultimately obtain an indirect return even if it won’t be ourselves but our children or great grand children who will enjoy it.

For instance, this paper documents an experiment that shows that when people know that their donations are being watched, they tend to donate more.

Another example is a study on blood donors in Italy that has shown that “that donors significantly increase the frequency of their donations immediately before reaching the thresholds for which the rewards are given, but only if the prizes are publicly announced in the local newspaper and awarded in a public ceremony”.

In a Web 2.0 world, this public announcement would translate to the blood bank issuing a virtual badge  certificate, that the donor would be able to shout out to their friends on Facebook or publish on their Web sites.

There are many blood donors Facebook groups, but I don’t believe anyone requires a certified blood donation to become a member. The closest think to a blood donor reputation badge is the I give blood application, allows your blood center to automagically upload your donation and cholesterol history and your blood type to your profile page.

Badges are also used in the Foursquare social game application, but are less serious. “They are little rewards you earn for doing interesting things – e.g. staying out late on a school night or visiting places far outside your neighborhood”.

Despite the positive potential that these reputation badges could unleash, I am not aware of any standard mechanism in social networks that support this. You can advertise a donation you’re making via TipJoy, but you can’t get a certified donor/benefactor/donator for all the good things you’ve done.

As Jody Reale mentioned this morning: “Why nothing positive is ever recorded in one’s “permanent record.”

One simple way to achieve this would be for non-profits receiving donations to publish on their Web site the name of the donors. This is something Wikipedia does. It wouldn’t take much for donation receivers to microformat these pages with hReview (the URI pointing to the Web identity of the donor), in a way that it can be easily extracted, aggregated and re-published on social networks.

Semantic Marketing

Scott Brinker has a great article on the role of marketing in a semantic Web world.

This is a very valid question, since the semantic Web world will IMO mark the end of the “destination” Web and the advent of the “me” Web: I don’t need to go to any Web site to get my information, it gets instead aggregated and filtered out of the junk I don’t want to see in the format I enjoy to consume it the most, one of the filters being the reputation I have of the author of the content as weighted by each member of my social network.

I agree with Scott that good semantic marketing will start with good, and accurate data and metadata about products/services, good distribution in particular via compliance with various established publication standards (microformats, RDFa, etc.).

If I’m correct on how data relevancy will be established by leveraging your social network, SEO will essentially become the old name for “Reputation Engineering” or “Reputation Hacking”. The more reputation your company has in a given social network, the more it will top query results.

In terms of ads, since we are left with a single destination that one can see as the next-generation RSS reader, I see two models:

  • Contextual ads next to the content/data my collection of queries is typically retrieving. This is similar to the ads you have in Google Reader.
  • Suggestions (similar to Google Suggests) as I’m creating my query in my semantic query builder, companies pay for certain categories of products or names to show up higher in the list (imagine a Google Suggests where companies can bid to push words higher in the list of suggested items).

Defining and relating reputation, whuffie, attention, social capital and privacy

Reputation

I define having reputation as having reputable third parties willing to confirm one’s claims as true.

These claims include:

  • personal information such as one’s date of birth or first name, 
  • transaction information such as timely re-payment of debt following a credit card purchase, 
  • opinions expressed that are shared by others such as a blog post or 
  • actions done or not that are approved by others
  • artifacts produced that are appreciated by others

Whuffie 

Verifying someone’s claims used to be expensive and limited to a few players, such as credit bureaus in partnership with credit card networks. The recent computerization of communications has reduced the authentication cost by increasing the amount of authenticatable information (in the form of published opinion/thought pieces) and the potential number of authenticating parties, leading to my understanding of the concept of whuffie. 

Linking with attention 

I say “potential” because 3rd parties will not authenticate content unless one has their attention in the first place. Attention is limited the nature of people’s cognitive capabilities and is ideally dependent on their goals, but also a function of one’s reputation, which leads us to…

Social capital 

The self-reinforcing aspect of reputation together with each person’s limited attention and exploding amount of authenticable information is what explains social capitalism: the authenticable information created by some is republished by others and through this process fully/partly appropriated because of their reputation. This is similar to Marx’ capital where part of the value-add of workers’ labour is appropriated by employers because of their ownership of the productive asset.

Examples include bloggers or journalists who are given exclusive information before it is published because of their established trademark. They don’t need anymore to find a good story, only to filter it out from what they receive.

Attention is the new capitalistic asset to own, maybe the new money considering that people’s attention is limited and that it is dispensable by those with social capital.

(Side note: assuming attention is driven by goals (see Flow), owning attention is done by getting others to align their goals on one’s goals).

Privacy 

What is interesting about reputation is that it does not necessarily require information to be published. It only requires someone reputable to confirm it as true. I don’t need to tell you that I’m over 21 years old, but just need to point you to someone reputable that can confirm my claim.

In other words, privacy may not be dead, but it has to be dead with one or a few highly reputable parties.

The relation to OpenId and OAuth

It derives from the above that an OpenId or OAuth provider’s relevancy is proportional to its reputation. Its value is proportional to its ability to actually verify the information it hosts.

BarCampBankDallas, Whuffie and open Banking Web APIs

I wasn’t able to attend BankCampBankDallas, but Charlie over at Open Source CU wrote a nice report highlighting some of the concepts that were discussed during the camp:

  • Incorporating online reputation into financial reputation: “why can’t [FIs] hook into LinkedIn and view a person’s Recommendations and process that into their credit score”
  • Opening a FI’s APIs to the creativity of their customers and 3rd party developers: “could there ever be a day where an existing financial institution could let people hook into it and meaningfully tailor the infrastructure and product to their own needs?”

I think exploring the links between online reputation and financial reputation is very interesting indeed. I think leveraging public social data is a great way for banks to reduce the risk of payment default on people with less than perfect credit. I’ve talked about this before, particularly in the context of peer-to-peer lending: in the problem with banking innovation…, I explained how a loan where some of the people lending money are family members offers a different and more attractive risk profile than someone’s lending money from people they don’t know (and don’t care) about (especially when you have a huge securitization food chain). I had never thought that such data could eventually actually be part of the FICO score, and that I think that will take A LOT of time. Here is my guess at how things will evolve: I think that Experian-like services computing someone’s overall reputation (see how to compute someone’s whuffie) will develop, and as they become established brands, may end up as an input to FICO scores. Anyway, I do think FIs are fundamentally social intermediaries and can’t afford to ignore the publicly available social data. I think there is a great opportunity, especially at credit intermediaries whose goal is the benefit of the community (credit unions), to re-socialize credit relationships.

Regarding the opening of Banking Web APIs, I think also that this is a great way for FIs to smartsource innovation while ensuring the highest level of security standards. In the problem with banking innovation…, I suggested at the very end that one way to smartsource innovation could be to “do what Apple or Facebook do: expose some of this information via easy-to-use APIs in a way that is more secure than their startup competitors. Then, allocate a VC fund to fund startups using this API (which is equivalent to buy an option to invest more/buy out the most promising ventures later).”

So, I’m glad to see that these highlighted concepts are inline with some of my own ideas and probably with many other people. I really hope I can make it to the next BarCampBank near San Francisco.