Designing Reputation and Trust Management Systems

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Author(s): Roman Beck (Johann Wolfgang Goethe University, Germany)and Jochen Franke (Johann Wolfgang Goethe University, Germany)
Copyright: 2010
Pages: 18
Source title: E-Commerce Trends for Organizational Advancement: New Applications and Methods
Source Author(s)/Editor(s): Mehdi Khosrow-Pour, D.B.A. (Information Resources Management Association, USA)
DOI: 10.4018/978-1-60566-964-9.ch007

Keywords: Business & Management / Business Science Reference / E-Commerce

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Abstract

This article analyzes the handling of customer complaints after shipping ordered goods by applying automated reputation and trust accounts as decision support. Customer complaints are cost intensive and difficult to standardize. A game theory based analysis of the process yields insights into unfavorable interactions between both business partners. Trust and reputation mechanisms have been found useful in addressing these types of interactions. A reputation and trust management system (RTMS) is proposed based on design theory guidelines as an IS artifact to prevent customers from issuing false complaints. A generic simulation setting for analysis of the mechanism is presented to evaluate the applicability of the RTMS. The findings suggest that the RTMS performs best in market environments where transaction frequency is high, individual complaint-handling costs are high compared to product revenues, and the market has a high fraction of potentially cheating customers.

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