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Connected to the internet you have a lot of opportunities to interact with strangers. Some of the interactions are funny or informative and some of them are profitable and all involve risks. A reputation system gives people information about others's past performance. It helps people decide who to trust, encourages people to be more trustworthy and discourages those who are not trustworthy from participating.

Value Preposition: To WHOM does reputation provide WHAT value?
Q: Where can the availability of reputation information help to make things better?
A: Generally, reputation helps to decide wheter or not to interoperate with a unknown peer. More specifically,
it helps to maximize the return on an fixed investment of resources (time, monney, attention) (see Example)
it helps to control access to uncritical (e.g. low cost) resources (see Example)
it enables relaxed policies in certain business processes (see Example)
Q: How does it help there (what does 'better' mean)?
Limitations: What can Reputation Information NOT provide?
Access control for critical resources
Reputation is a statistical guess for future behaviour on the basis of the past. Therfore only statistical estimates for the behaviour of a sufficient large ensemble of peers can be taken. For one individual a strict prognosis is impossible.

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