How Important Is a Good Reputation?
David Rand Answers

Having a good reputation is vital. Or maybe more precisely, it is essential to have a reputation for being good (in whatever sense is appropriate for the context).

Among your friends, for example, it may be important to have a reputation for being enjoyable to be around—if you instead have a reputation for being a nuisance, your friends will not be so quick to spend time with you. At the office, it is important to have a reputation for being competent and hardworking, otherwise supervisors and co-workers will be less willing to trust you with important projects, and you may eventually lose your job. In the context of commerce, it’s extremely important for businesses to have good reputations for making quality products or else they will lose customers.

Behind these anecdotal observations, a body of theoretical and experimental work shows that effective reputation systems can benefit society by enforcing cooperative behavior and enabling trust. Our paper in this week’s edition of Science provides evidence of the important role reputation plays in facilitating positive interactions: We show that when people can keep track of each other’s past behavior, rewards can effectively promote collective action and discourage free-riding.

David Rand is a post-doctoral fellow in mathematical biology at the Program for Evolutionary Dynamics and a fellow at the Berkman Center for Internet & Society at Harvard University.

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