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[email protected] (Timothy C. May) writes:
> Briefly, think of "restaurants" when thinking about reputations. If one
> arrives in a new city, most restaurants may have the same baseline
> reputation, e.g. "none." A few may be known by name, for their
> "reputation," either good ("You have to eat at Louie's--the laser chicken
> is incredible") or bad ("Blecch!). Positive reputations and negative
> reputations are self-explanatory. And the reputations of others may affect
> the reputations of restaurants ("John Gilmore says he likes the Burma
> Burger on Castro Street."). Bad recommendations may affect the "reputation
> capital" of John, for example. (We speak of "reputation capital" because it
> can in some sense be "spent.")
That part of the "reputation capital" theory has always seemed
suspicious to me. "reputation capital" doesn't behave linearly. There's
too much incentive to bottom-feed and too little incentive to shoot for
the heights. As an "asset", it is extremely non-liquid. It is hard to
spend it in a controlled manner.
Too much incentive to bottom-feed:
For example, let's say there's someone well-known who frequently speaks
nonsense on crypto issues. We'll call her "Norothy Nenning". She makes a
recommendation on some particular crypto issue, say "The government's
Nipper chip is a safe and effective form of crupto". Plenty of naive
people will credit her to some degree. True, fewer people than if she
had carefully husbanded her reputation, and to a lesser degree, but
still a lot more than zero.
Notice that that's a zero cost/benefit ratio. She never does anything to
husband her reputation, she just spends it every chance she gets. And
while no single expenditure rewards her as much as it would if she made
the same expenditure with a good reputation, she spends so much more
freely that it is a good strategy for her on the whole.
"Reputation capital" is hard to spend down to absolute 0 because it is
significant work to distinguish valid "reputation capital" from
worthless counterfeit, and it is easy to counterfeit... just talk.
I anticipate the answer "Well, the work pays off". But that misses the
point. Frequently the work required to tell the good "reputation
capital" from the worthless is as much as would be required to find the
straight dope yourself.
Too little incentive to shoot for the heights:
Suppose you judge that you've accumulated twice as much "reputation
capital" as Joe. How do you get twice as much payoff? It seems to me
that above the threshhold of credibility, minor side issues make more
difference than your two-fold "reputation capital" differential.
As an "asset", it is extremely non-liquid:
How exactly would you "convert" your reputation into other capital?
Would you accept bribes and tell lies? Seems to me you would only get a
one-shot "conversion" and it couldn't possibly hope to equal your
As soon as you leave the information-broker business, you discover that
your "asset" cannot be converted, sold, auctioned off, or much of
anything else of value to you.
It is hard to spend it in a controlled manner:
See above. The single bribe-and-lie will spend your "reputation capital"
down to below the threshhold of credibility, no matter how much you
Human discourse often tends to be absolutist. It is often very difficult
to make people understand and retain a message of partial support or
qualified support. Particularly on hot issues. Restaurants, sure, you
can give 1 to 5 stars, but in many subject areas there is no such
system. And any system you yourself invent tends to be ignored.
So I think the latter part of the analysis is wishful thinking, or at
least restricted to a small subset of subject-matter.
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