Overcoming Lemon Markets with Business Reputation Ecosystem – A Multi-agent Simulation on Monetary Ratings

Abstract. Business reputation ecosystems are a widely untapped research field. In these ecosystems, agents can selectively exchange (monetary) ratings to in-form about the experienced quality in a market. We build a model for conducting a multi-agent simulation that can be used to simulate and evaluate business rep-utation ecosystems as a new system class. We explore the factual occurring vol-untary payment to create positive (pay) or negative ratings (no pay), selling rat-ings selectively to alleviate information asymmetry, and the workings of counter-ratings to prevent buyers' dishonest ratings. Thereby, we analyze, among others, agent profitability, the occurrence of dishonest ratings, and reputation bias and sensitivity. The results provide simulation-based empirical evidence that the con-cept of monetary reputation systems provides necessary incentives for participa-tion, and high-quality sellers and honest buyers benefit from such a system. The results indicate that counter-ratings prompt buyers