Reputation, reputation, reputation I’ve said ad nauseam on this blog and elsewhere, and quoting John Kay, the way we work out what’s good and what’s not is not by assessing it individually but by reputation.  We know that Apple makes insanely great products not because we get our screwdriver out and check its specs, but because it has a reputation for doing so (and Steve Jobs has done an amazing job of making us all a little crazy about Apple, just like him).

So it’s odd that so much of our regulation to improve information flows in markets focuses on disclosure (showing us the back end of the computer) rather than on improving the way in which reputations are formed.  The web is doing a marvellous job here of course and this post was provoked by the launch of a new site which is dedicated to indexing ratings websites – and perhaps rating them!

Now if we can get the itchy hands of regulators thinking less about how they can mandate disclosure which is then routinely ignored, and thinking instead about how they can improve the accuracy of reputations in the marketplace, for instance how they might be able to support ratings websites in various ways, that might help them do their job better (they have lots of challenges from defamation to verifying the identity of people making claims about others) we might be able to make more progress than we have with ‘disclosure’ regulation.

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16 years ago

Hmmm…Isn’t part of the rationales for disclosure that it can help protect people from, amongst other things, reputations?

Ie someone might think that product X is marketed by a bank, it must be safe – chances are the PDS won’t help them, but it does give them some information on which to make a more rational assessment, if they read it.

16 years ago

You’ve talked about information policies quite a bit and you have convince me they have alot of potential. But you are also skeptical of government’s ability to deliver them. That seems to leave us in a position where there is no policy to implement and

Can you give us a suggestion for a government policy which you feel will improve market information even when implemented by a real world government? You may have covered this before and if so I apologize for the request, but I have read a few of your posts on this idea and while the theory seems good it does not seem to translate into practical policies a government could implement. I am especially curious as to whether there are any “low hanging fruit” policies in this area.

frank luff
frank luff
16 years ago

When buying second hand, letting those with money to make judgements
I can’t afford to make error on, reputation is valid.
I researched for some years on computers and the pros and cons of what I neede a computer for.
Apple came up trumps, the interface was easier than windows and I didn’t want to be one of the mob so encouraging pranksters to spoil my fun.
The thing not accounted for was the marketing system of dribbling improvments.
I bought at first, new! never again it was an expensive lesson.
Not needing stuff”leading edge” just reliable and easy has been my guide since that first expensive mistake.
Still with Apple because new learning of systems is not my go, I am happy to operate a ten year old machine at 500 mb, at least ten year old and it cost peanuts on ebay.
New is for nerds, not me. If deciding on reputation is your only choice I fear for you.