Buzzword: Reputation Economy

What does it mean? “Reputation economy” refers to the way in which a product’s or a person’s—really just about anything's—standing is shaped by the contributions of end users, known as “consumers” way back in the pre-Internet age. The term is largely associated with Web 2.0 applications, which are more interactive and network-based than earlier Web sites. The wisdom of the crowd matters, according to this new model, whether what’s being evaluated is a cooking appliance, a video on YouTube, or a definition of the term reputation economy.

Why the buzz? “Reputation economies are part of the world we live in,” says Jack M. Balkin, Ph.D., Knight Professor of Constitutional Law and the First Amendment at Yale Law School. Balkin directs the school’s Information Society Project, which hosted the “Reputation Economies in Cyberspace” symposium in December 2007. Talks at the event centered on the idea that “we have witnessed the development of alternative models for reputation management, including third-party certificate authorities, peer-produced evaluations, ratings, stars, points, karma, and others,” according to the ISP Web site.

Consumer Reports is deeply involved in the reputation economy, though we rely on measures more exacting than karma. Take cooking appliances. Once we’ve reviewed the market place and acquired a representative mix of models and brands, our evaluations begin with extensive in-lab testing. (For our latest ranges report alone, our technicians cooked 700 pounds of beef and 6,200 cookies.) Out of these findings and subsequent deep statistical analysis emerge our Ratings and recommendations.

We also track how well appliances hold up in the real world with actual end users—you and hundreds of thousands of other readers. To gather data for our Brand Repair History, the Consumer Reports National Research Center sends out the Annual Product Reliability Survey to our subscribers. Our experts analyze the results to come up with the brand-repair data that appear in our magazine and on ConsumerReports.org. In the case of electric ranges, for example, responses from more than 61,000 subscribers told us that, from 2001 to 2007, Jenn-Air and KitchenAid have been relatively repair prone, while Hotpoint and GE have scored particularly well for reliability.

Our user reviews—available to subscribers on specific model pages—further our connection to the reputation economy. “The glass on the oven door of this range is tinted green and makes the range look like a UFO in your kitchen,” wrote a disgruntled owner of a one gas range. “I have used this range/oven for 4 years with no repairs except where I dropped a cast iron pan on the top and chipped the porcelain,” noted a more-satisfied user of a top-rated freestanding range.

We also host forums where you can add your own two cents on a variety of products and services. The comments can be brutal—“The WORST customer service I’ve ever seen ANYWHERE,” barked one contributor to our mattresses forum. But the feedback isn’t always so venomous. “Best mattress we’ve ever owned,” a second person opined.

Our blogs end with a comment box where you can weigh in on the topic at hand. It’s a way to keep the dialogue going and, yes, put our own rep on the line. With that, the floor is open on this discussion of reputation economy.—Daniel DiClerico

Comments

[rebecca]

I'm just really glad there is a publication like Consumer Reports, which isn't based entirely on what consumers think and feel but also what experts have found to be true. While I'm all for information being democratic, we need more authority in our culture at this point.

[Mark Wilkenshoff]

KitchenAid appliances have "had" and been the beneficiary of a reputation for high quality appliances that are known for longevity; however our experience with trying to get a replacement cover for a food processor has done a good job of changing this reputation to a negative for us. We tried to order a new cover in August of 2007 and to date March 2008 have only gotten the "run-around" response of since our product is no longer manufactured/discontinued that it is on back order.