~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ SANDY SANDFORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C'punks, On Mon, 16 Oct 1995, Wei Dai wrote: . . .
Two main components of transaction cost in an anonymous market will be the cost to maintain anonymity and the cost to evaluate reputations. . . . The second big part of transaction cost in an anonymous market is reputation evaluation. Of course, normal, everyday transactions require reputations to be evaluated. However, more effort and cost will be expanded on these evaluations in an anonymous market because the effects of misevaluations will be much more damaging. Reputations must be constantly reevaluated, as pseodonyms are easily transfered. Since no good theories of reputation currently exist, these evaluations are difficult to automate. Perhaps theoretical advances can make these evaluations easier and/or more accurate. However there does not appear to be any major research effort in this area.
This is only true if you assume everyone will do their own reputation evaluation. This is a third-party insurer problem, really. Either a "Lloyds of London" or a "Good Housekeeping" model would do the trick. S a n d y ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~