Reputation capital is something I’ve recently become more interested in since joining the Second Life virtual community. It’s certainly something I’ve used in my real life – my rep and not my salesmanship have gotten me the design projects that pay the bills. Most people understand how it all works… in the real world. But how it functions in a virtual world or online is a bit more complex. That old New Yorker cartoon “On the internet, nobody knows you’re a dog” comes to mind here.

In the real world, there are obvious consequences for bad behavior. But in a virtual world the perception of anonymity leads many to behave in ways they wouldn’t dare in real life. Except there’s often a consequence from what I’ve observed which takes at least one of two forms:

a) the shroud of anonymity is removed and inappropriate virtual behavior is linked to a real life person… surprise, surprise. So the “dog” isn’t entirely correct; with effort, a person’s real life identity can often be determined. The RIAA’s lawsuits against “anonymous” music pirates are one example.

b) the real life person has invested time and effort in some facet of their virtual representation and their poor reputation at some point becomes a barrier to further reward. For example, they might have stated their dislike for a particular group of people… gays, liberals, asians, whatever… but then find that to “level up” in some fashion they require the assistance of another individual who belongs to one of the disparaged groups. Open mouth, insert foot.

If you’ve been reading my blog, you might recall this post that dealt with reputation. There’s a link in there to a WorldChanging post (here) and inside that is a link to a Terra Nova entry (here). Interesting reading. Add to that this video interview over on Release 1.0 that discusses Online Reputation Systems with an eBay representative. It’s not too long and very informative.

The reason I bring this up now is the big news that eBay has purchased Shopping.com. For more about that, BusinessWeek online has a report you can read here. And notice this line in the BW article:

The purchase is true to eBay’s custom of following its customers into new markets.

Now if eBay follows their customers, and more and more virtual goods start changing hands, then it stands to reason eBay will at some point move into that territory. So now you see why reputation is such an interesting element. Without their feedback system, eBay might not be the success they are today. And reputation systems are increasingly important in virtual activities – whether games or worlds.

And btw, I assume people are aware that eBay’s founders have invested in Second Life and perhaps other virtual world projects.