An Experimental Study of the Reputation Mechanism in a Business Game

Reputation enables different parties to establish a trusting and cooperative relationship, a key factor in integrative negotiations referred to as “win-win” negotiations. Thus, a good reputation mechanism can bring simulations closer to reality. In this study, the authors review the reputation mechanisms applied to the online business game WIN WIN MANAGER, where the players’ reputations are decided by their counterparts at the end of each negotiation. Then, the authors compare two reputation mechanisms and hypothesize that the best mechanism will be more positively correlated with the negotiation outcome, which is measured by a scoring algorithm. Using nonparametric statistics, it is highlighted that the reputation mechanism in earlier versions of the game seems to produce values unrelated to the score, whereas the new mechanism produces values significantly positively correlated with the score. Such results can be useful to scholars who conduct experiments on negotiation, as well as online markets in which users are allowed to negotiate with one another.