Chrysanthos Dellarocas

The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms

Online feedback mechanisms harness the bidirectional communication capabilities of the Internet to engineer large-scale, word-of-mouth networks. Best known so far as a technology for building trust and fostering cooperation in online marketplaces, such as eBay, these mechanisms are poised to have a much wider impact on organizations. Their growing popularity has potentially important implications for a wide range of management activities such as brand building, customer acquisition and retention, product development, and quality assurance. This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms represent. It discusses some important dimensions in which Internet-based feedback mechanisms differ from traditional word-of-mouth networks and surveys the most important issues related to their design, evaluation, and use. It provides an overview of relevant work in game theory and economics on the topic of reputation. It discusses how this body of work is being extended and combined with insights from computer science, management science, sociology, and psychology to take into consideration the special properties of online environments. Finally, it identifies opportunities that this new area presents for operations research/management science (OR/MS) research.

Immunizing online reputation reporting systems against unfair ratings and discriminatory behavior

reporting systems have emerged as an important risk management mechanism in online trading communities. However, the predictive value of these systems can be compromised in situations where conspiring buyers intentionally give unfair ratings to sellers or, where sellers discriminate on the quality of service they provide to different buyers. This paper proposes and evaluates a set of mechanisms, which eliminate, or significantly reduce the negative effects of such fraudulent behavior. The proposed mechanisms can be easily integrated into existing online reputation systems in order to safeguard their reliability in the presence of potentially deceitful buyers and sellers.

Introduction to the Special Issue—Social Media and Business Transformation: A Framework for Research

Social media are fundamentally changing the way we communicate, collaborate, consume, and create. They represent one of the most transformative impacts of information technology on business, both within and outside firm boundaries. This special issue was designed to stimulate innovative investigations of the relationship between social media and business transformation. In this paper we outline a broad research agenda for understanding the relationships among social media, business, and society. We place the papers comprising the special issue within this research framework and identify areas where further research is needed. We hope that the flexible framework we outline will help guide future research and develop a cumulative research tradition in this area.

A Knowledge-based Approach to Handling Exceptions inWorkflow Systems

This paper describes a novel knowledge-based approachfor helping workflow process designers andparticipants better manage the exceptions (deviationsfrom an ideal collaborative work process caused byerrors, failures, resource or requirements changesetc.) that can occur during the enactment of aworkflow. This approach is based on exploiting ageneric and reusable body of knowledge concerning whatkinds of exceptions can occur in collaborative workprocesses, and how these exceptions can handled(detected, diagnosed and resolved). This work buildsupon previous efforts from the MIT Process Handbookproject and from research on conflict management incollaborative design.

Are Consumers More Likely to Contribute Online Reviews for Hit or Niche Products

User-generated content has been hailed by some as a democratizing force that enables consumers to discuss niche products that were previously ignored by mainstream media. Nevertheless, the extent to which consumers truly prefer to use these new outlets to discuss lesser-known products as opposed to spending most of their energies on discussing widely marketed or already successful products has so far remained an open question. We explore this question by investigating how a populations propensity to contribute postconsumption online reviews for different products of the same category (motion pictures) relates to various indicators of those products popularity. We discover that, ceteris paribus, consumers prefer to post reviews for products that are less available and less successful in the market. At the same time, however, they are also more likely to contribute reviews for products that many other people have already commented on online. The presence of these two opposite forces leads to a U-shaped relationship between a populations average propensity to review a movie postconsumption and that movies box office revenues: moviegoers appear to be more likely to contribute reviews for very obscure movies but also for very high-grossing movies. Our findings suggest that online forum designers who wish to increase the contribution of user reviews for lesser-known products should make information about the volume of previously posted reviews a less-prominent feature of their sites.

Exception handling in agent systems

A critical challenge to creating effective agent-based systems is allowing them to operate effectively when the operating environment is complex, dynamic, and error-prone. In this paper we will review the limitations of current agent-local approaches to exception handling in agent systems, and propose an alternative approach based on a shared exception handling service that is plugged, with little or no customization, into existing agent systems. This service can be viewed as a kind of coordination doctor; it knows about the different ways multi-agent systems can get sick, actively looks system-wide for symptoms of such illnesses, and prescribes specific interventions instantiated for this particular context from a body of general treatment procedures. Agents need only implement their normative behavior plus a minimal set of interfaces. We claim that this approach offers simplified agent development as well as more effective and easier to modify exception handling behavior.

Analyzing the economic efficiency of eBay-like online reputation reporting mechanisms

This paper introduces a model for analyzing marketplaces, such as eBay, which rely on binary reputation mechanisms for quality signaling and quality control. In our model sellers keep their actual quality private and choose what quality to advertise. The reputation mechanism is primarily used to determine whether sellers advertise truthfully. Buyers may exercise some leniency when rating sellers, which needs to be compensated by corresponding strictness when judging sellersfeedback profiles. It is shown that, the more lenient buyers are when rating sellers, the more likely it is that sellers will find it optimal to settle down to steady-state quality levels, as opposed to oscillating between good quality and bad quality. Furthermore, the fairness of the market outcome is determined by the relationship between rating leniency and strictness when assessing a sellers feedback profile. If buyers judge sellers too strictly (relative to how leniently they rate) then, at steady state, sellers will be forced to understate their true quality. On the other hand, if buyers judge too leniently then sellers can get away with consistently overstating their true quality. An optimal judgment rule, which results in outcomes where at steady state buyers accurately estimate the true quality of sellers, is analytically derived. However, it is argued that this optimal rule depends on several system parameters, which are difficult to estimate from the information that marketplaces, such as eBay, currently make available to their members. It is therefore questionable to what extent unsophisticated buyers are capable of deriving and applying it correctly in actual settings.

Using Domain-Independent Exception Handling Services to Enable Robust Open Multi-Agent Systems: The Case of Agent Death

This paper addresses a simple but critical question: how can we create robust multi-agent systems out of the often unreliable agents and infrastructures we can expect to find in open systems contexts? We propose an approach to this problem based on distinct exception handling (EH) services that enact coordination protocol-specific but domain-independent strategies to monitor agent systems for problems (‘exceptions’) and intervene when necessary to avoid or resolve them. The value of this approach is demonstrated for the ‘agent death’ exception in the Contract Net protocol; we show through simulation that the EH service approach provides substantially improved performance compared to existing approaches in a way that is appropriate for open multi-agent systems.

Cooperation Without Enforcement? A Comparative Analysis of Litigation and Online Reputation as Quality Assurance Mechanisms

Commerce depends on buyers and sellers fulfilling their contractual obligations; mechanisms inducing such performance are essential to well-functioning markets. Internet-enabled reputation mechanisms that collect and disseminate consumer feedback have emerged as prominent means for inducing seller performance in online and offline markets. This paper compares the ability of reputation and more traditional litigation-like mechanisms for dispute resolution to induce efficient economic outcomes. We use a game-theoretic formulation and derive results for their relative efficiency and effectiveness individually or as complements. We find that the popular view of reputation as an efficient and relatively costless way to induce seller effort under all circumstances is incorrect; reputation is less efficient than litigation in inducing any given level of effort. Thus, reputation improves efficiency only in settings where the high cost of litigation, insufficient damage levels, or low court accuracy induce suboptimal effort or cause market failure. When adverse selection is important, reputation helps reveal the true types of market participants, which may offset its higher cost of inducing effort. Finally, adding reputation to existing litigation mechanisms increases seller effort and may require adjusting damage awards to avoid inducing excessive effort that reduces economic efficiency. n nThis paper was accepted by Lorin Hitt, information systems.

Money models for MOOCs

Considering new business models for massive open online courses.