Re: question about reputation

17 Dec 2003

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Wei Dai writes:
...
For example, Alice starts a anonymous consulting service, and announces 
that she will answer the first ten queries for free.  Upon hearing this, 
Mallet immediately starts another consulting service, and announces the 
same offer.  At this point Mallet can simply forward his customers' 
queries to Alice and Alice's answers back to his customers.  Thus, he gains 
reputation at no cost.
Well, long term he won't be able to keep it - what will he do when Alice
starts charging for her services? He can charge more than she does, and
they'll have equivalent "accuracy ratings" but Alice will provide her
services more cheaply - or he can stop asking Alice and make up his own
answers (or not answer) and his repuation will drop quickly. 

While I admit that I'd be pissed off if I were Alice, Mallet isn't
really harming her - she gets business at the rate she's established.
If Mallet's customers and Alice's don't overlap (maybe Mallet speaks/
writes in a different language, or has different friends) then it's
arguable that Mallet is doing Alice a favor. If Mallet continues to
purchase answers from Alice (even if he charges his customers more)
his reputation isn't really false, if you think of it as meaning
"can provide good answers to questions" versus "can figure out good
answers to questions by himself". 

More proactively, Alice might choose to publish the questions and 
answers publically (the customers are, after all, anonymous,
and only revealing as much about themselves as they'd reveal to an
unknown party - Alice could sanitize the questions of identifying
facts even further, if appropriate) - this would prove her aptitude 
(or lack thereof) to a wider audience, and Mallet's customers could
notice that she was providing answers to their questions (how did
she know of their questions?) before Mallet does. 

Alice could also choose to answer questions for free, but only to
named and well-known parties with good reputations. This is a 
standard trick for new consultants/businesses - work cheap or free
for a person or business that comes in contact with many people or
gets lots of publicity. Cochran, Shapiro, et al could make a fortune
from the Simpson trial even if they didn't charge OJ a dime - 
people charged with serious crimes will be calling them for years to
come because of their media exposure. If Alice is paranoid, the 
well-known party could post a bond with an escrow agent, to be 
returned when they posted a public evaluation of Alice's services.
...
On the other hand, this "man-in-the-middle" attack can also work against
conventional True Name based services, but perhaps with less effect. Has
anyone ever heard of this being done?
This "man-in-the-middle attack" is called, variously, arbitrage or
capitalism. :) You've rediscovered Marx' surplus value theory of
labor. (shh, don't say any more, or someone will say we're using
language wrong.)

Greg Broiles

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