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The Square-Root Agreement Rule for Incentivizing Objective Feedback in Online Platforms

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Document pages: 56 pages

Abstract: A significant challenge in obtaining evaluations of products or services on e-commerce platforms is eliciting informative responses in the absence of verifiability. This paper proposes the Square-Root Agreement Rule (SRA): a simple reward mechanism that incentivizes truthful responses to objective evaluations on such platforms. In this mechanism, an agent gets a reward for an evaluation only if her answer matches that of her peer, where this reward is inversely proportional to a popularity index of the answer. This index is defined to be the square-root of the empirical frequency at which any two agents performing the same evaluation agree on the particular answer across evaluations of similar entities operating on the platform. Rarely agreed-upon answers thus earn a higher reward than answers for which agreements are relatively more common. We show that SRA achieves several desirable incentive properties that make it uniquely attractive amongst known mechanisms for administering reward-based incentive schemes (e.g., rebates, discounts, reputation scores, etc.) on these platforms.

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