Paul proposed a conjecture regarding the validity of using reputation systems in the context of identity systems. This (and some discussion on the IDGang list) inspired me to dig again through some of my notes regarding the ontology of physical reality (and thus–by extension–quantum theory).
My personal position in the discussion on the most sensible approach to physial ontology was always firmly rooted in the realist corner: I completely reject positivism and–mostly– empiricism on fundamental principle. There is no doubt in my mind that there is an objective physical reality, independent of human (or any other) observer.
Reputation in information systems
Now, a reputation scheme can easily be interpreted as mechanism to determine the value of an entity’s attribute by averaging over the subjective values of that particular attribute, as seen by an ensemble of parties interacting with the entity in question. So, for example, to determine the “trustworthiness in business transactions” of user A of an auctioning site, one can average over the subjective opinion of business partners of user A on his trustworthiness.
This approach is valid, and as many social (or even business) sites indicate very useful. It can be applied reasonably well to attributes of an entity that are either non-counterfactual definite (i.e. completely subjective), or not measurable by an objective and reproducible measurement approach.
“Trustworthiness” is a good example for a subjective attribute, and credit-worthiness of a company or individual might be an attribute of the later type: while the fundamentals of a company determine its ability to shoulder a certain about of debt without collapsing, there is (to my knowledge) no definite algorithm to compute a simple “creditworthiness” attribute. However, the averaging over the credit ratings from different rating agencies (i.e. a kind of “credit reputation”) is normally a good approximation of this attribute.
However, there are some attributes that cannot be averaged over: those attributes are counterfactual definite, i.e. objective and can be measured by a repoducible mechanism. A good example for such an attribute is my physical height, my employment status with a given company, or my gender. All of these might change in time, but at a given point in time, they can be easily determined and have an objective value–even if nobody measures it. Applying a mean-value approach to these does not make any sense.
One might interject, that for such a counterfactualy definite attribute there might be a different perception of its value with other entities. For example, while my actual height is 187cm (~ 6′ 1″), some people might think that I am taller or shorter. Now, my actual height does not change because a number of people are thinking so. It is my perceived height that changes and this attribute is entirely different from the former.
So, in the end it is very important to evaluate carefully if a given attribute of an entity in an information system lends itself to be used in the context of reputation systems. In some specific cases this does make sense, but in others it is entirely pointless.
 Yet, while realism is vital to my world view, I am much more inclined to abandon local reality than counterfactual definiteness.
 The current financial quagmire is an example of how such a reputation system can fail.
While I think you are right in principles, I cannot agree that these principles can be directly applied to Internet.
All information on Internet is subjective. It is always an opinion of the author of that information. If I say I’m 195cm tall, that’s my opinion about my height. How can you make sure that information is true? You can send someone here to measure my height, and he will get the same number. But if he publishes that on the Internet, it’s again his opinion on my height. Both of us can lie and I may in fact be only 150cm tall.
There may be unquestionable *facts*. But I don’t think that there is any unquestionable *information* (at least on the Internet). All information is subjective and should be regarded as such.
Nope – to some extend I agree with you: all measurements must be accompanied by an error margin, and reputation might be a useful precursor to such a concept viz-a-viz information.
Nevertheless, I joined into this discussion when some folks took a very positivist point of view (at least this is how I read it).