Research Ideas: Strategy-proof Reciprocal Rating

The problem of finding methods to establish trust and reputation in an online marketplace has attracted many researchers for the last two decades, as the transactions in online marketplaces are anonymous, geographically sparse, and sequential in nature. Various forms of feedback system has been designed to ensure the accuracy of a review, portray the proper reputation, and maintain the balance of information between various stakeholders in the marketplace in order to maintain a certain amount of trust within it. Of all these forms of feedback, Reciprocal Review system, where buyer and seller both rate each other and the aggregate rating is subsequently used as a proxy for reputation (or 'willingness to buy') in the market, was thought to be one of the finest mechanisms to ensure trust and accuracy of the system for its unique design of cooperation. Companies like eBay, Uber, Lyft, Airbnb, had adopted the Reciprocal Review system to establish trust among the buyer and the seller, but it was seen that Reciprocal Review system was not able to provide an accurate picture of the marketplace in terms of the service quality. Reciprocity was found to be extremely high in this system of review/rating, and thus the average ratings were found to be significantly higher than that were found in other similar marketplaces. 

I propose to design a system where I would show that establishing trust and ensuring reputation can be possible within the domain of Reciprocal Review. I would develop a game theoretic model of the review/rating mechanism and show that the equilibrium of the proposed system ensures accurate review from both the parties in the marketplace, thus ensuring the level of trust in the market.