Reputation, prediction, and attention markets
Should attention, similar to capital, and reputation, similar to being a banker, be quantified? These can be attempted to be measured "scientifically" or by market mechanism.
How to trade "attention"?
how to trade "reputation"?
We know from the behavioural finance that the big markets (world equities, fixed income, commodities, and fx) suffer from emotional and psychological biases. What could be interactions and benefits of reputation and attention markets to established-value markets?
Reputation is a leverage of attention, meaning a person pays attention to reputable sources of information. Reputation seems to be "a node", while attention is the links between nodes. Reputation marketing is already a type of marketing. Can the marketing help to create the reputation markets?
The attention could become tradable, but possibly more transparent proxies will be traded realistically. In the extreme, human attention means human time, but we do have very different valuation for the time of different people. The job is a conversion mechanism between a person and his time. IN THE FUTURE, OUR ATTENTION WILL BE SOLD
a transition to a new economy User-rating systems are cut-rate substitutes for a skilful boss The management of a growing share of workers is outsourced to strangers. Perhaps, Cryptocurrenices: the native business model of attention (by Nick Grossman from USV) is indeed how attention can become measurable and even meaningful.
how incentives created by reputation markets should influence community behavior and the accuracy of assessments
- Reputation and Feedback Systems in Online Platform Markets a review by Tadelis, and also The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment
With the rise of online marketplaces as a major force in overall commerce, regulators have started considering whether and how to intervene in order to protect costumers from a variety of hazards. On one hand, the huge growth of online marketplaces suggests that feedback and reputation systems do a good job at policing bad actors and minimizing fraudulent behavior, possibly eliminating the need for onerous rules and regulations. At the same time a hist of studies described in this paper show that there are all sorts of biases in feedback and reputation systems that can be improved upon.
- The Market for Evaluations Christopher Avery, Paul Resnick, and Richard Zeckhauser
The mechanisms overcome three major challenges: first, evaluations, which are public goods, are likely to be underprovided; second, an inefficient ordering of evaluators may arise; third, the optimal quantity of evaluations depends on what is learned from the initial evaluations.
Platform Competition in Two-Sided Markets Jean-Charles Rochet, Jean Tirole December 13, 2002
Markets have their limits. Liquidity, discernible quality, etc. up to "the limits of capitalism", see four particular arguments from Albert Wenger
World After Capital: Limits of Capitalism (Intro & Missing Prices).
Matching markets (of Alvin Roth) work in some contexts, but can such a mechanism work for large "attention markets"?