Minimum payments that reward honest reputation feedback

Online reputation mechanisms need honest feedback to func-tion effectively. Self interested agents report the truth only when explicit rewards offset the cost of reporting and the po-tential gains that can be obtained from lying. Side-payment schemes (monetary rewards for submitted feedback) can make truth-telling rational based on the correlation between the reports of different buyers. In this paper we use the idea of automated mechanism design to construct the payments that minimize the budget required by an incentive-compatible reputation mechanism. Such payment schemes are defined by a linear optimization problem that can be solved efficiently in realistic settings. Furthermore, we investigate two directions for further low-ering the cost of incentive-compatibility: using several ref-erence reports to construct the side-payments, and filtering out reports that are probably false