TrustDavis: A Non-Exploitable Online Reputation System

TrustDavis: A Non-Exploitable Online Reputation System

Dimitri DeFigueiredo and Earl T. BarrDept. of Computer Science, University of California at Davis

Dimitri DeFigueiredo

Joint work with Earl

TrustDavis: A Non-Exploitable Online Reputation SystemD. DeFigueiredo and E. T. Barr Computer Science, UCDavis

2

Motivation


Tell little story about buying your wife a present for your 10th aniversary. As usual, geeks always try to solve the problem online first.This is an amazing deal!


3

Motivation

• Should we buy?

• How do we decide?


4

Motivation


Read "Trust-me.com" if it is too small for others to read it.Point out that we use seller information to answer questions on previous slide


5

Motivation

• Should we buy?• How do we decide?

• What we want:– accurately estimate risk of default– minimize the risk of default– minimize losses due to pseudonym change– avoid trusting a centralized authority

• How do we achieve these goals?


Tie each of the points in the list to the Rolex example.Be fast, you only want to appeal to the audience's intuition.


6

Motivation

• TrustDavis is a reputation system that realizes these goals.

• It recasts these goals as the following properties:


7

Motivation

1. Agents can accurately estimate risk– Third parties provide accurate ratings

2. Honest buyer/seller avoids risk (if possible)– Insure transactions

3. No advantage in obtaining multiple identities – Agents can cope with pseudonym change

4. No need to trust a centralized authority– No centralized services needed


You may want to use Earl' s "Because" to introduce each sub-item.


8

Motivation

Incentive Compatibility:

Each player should have incentives to perform the actions that enable the system to achieve a desired global outcome.


Explain what incentive compatibility is


9

Motivation

1. Agents can accurately estimate risk– Third parties provide accurate ratings

2. Honest buyer/seller avoids risk (if possible)– Insure transactions

3. No advantage in obtaining multiple identities – Agents can cope with pseudonym change

4. No need to trust a centralized authority– No centralized services needed

Incentive Compatibility!


Point out that there should be incentives for parties to do each of the sub-items (specially the first 2).


10

Motivation

A Reference is:

Acceptance of Limited Liability.

$100

BAC


Explain *in detail* the example, I think it will pay-off later in the talk.Example:If A gives C a $100 reference against bad behavior of B then A is liable for up to $100 if B defaults.


11

Motivation

1. Agents can accurately estimate risk– Third parties provide accurate ratings– Parties are liable for the references they provide

2. Honest buyer/seller avoids risk (if possible)– Insure transactions– Buyers/sellers pay for references to insure their transactions

3. No advantage in obtaining multiple identities – Agents can cope with pseudonym change– References are issued only to trusted identities

4. No need to trust a centralized authority– No centralized services needed– Anyone can issue a reference

Use References!


Show how through the use of references we are able to provide each of the incentives we required.


12

Motivation

Related Work:• Z. Abrams et al. – Workshop P2P Econ 2004• S. Buchegger et al. – Workshop P2P Econ 2004• C. Dellarocas – Ideabook 2004• S. Lee et al. – IEEE Infocom 2003• S. Kamvar et al. – “EigenTrust” 2003• J. Golbeck et al. – Sematic Web 2003• T. Riggs et al. – ACM/IEEE-CS CDL 2001


13

Outline

• Motivation

• The Model– Buying references– Selling references

• A Non-Exploitable Strategy

• Future Work

• Conclusion– Key ideas


14

Outline

• TrustDavis leverages social networks

• For now, examples assume No False Claims (NFC)

• The use of TrustDavis does NOT preclude trade outside the system.


Do not spend time on 2nd bullet. Emphasize that we make this simplifying assumption for illustrative purposes.


15

Paying for References

150

150100

50

50


Use the fact that I only have a $100 dollar reference to v_s to introduce the network and describe how I should proceed to insure the transaction.


16

Outline

• Motivation



• Future Work



Point out that:- we are going to establish upper bound from the point of view of "party seeking insurance"-then lower bound from the point of view of insurer-and that these bounds need not be tight. If there is a range, we do not specify the price.


17

• vb wants to buy three shirts.• Shirts cost $100 each from a

trustworthy seller• Unknown seller offers shirts for

$50 each (but maybe they are only worth $25).

• vb would risk 3 x $50 = $150 in the transaction

• vb can borrow and lend money at rate r=1.25 through the period of the transaction

For $30, vb can insure herself!


How much is vb willing to pay to insure the transaction? (No riskless profitable arbitrage criterion)

Example:

$100 each

Trust-me.com

Blowout SALE!

$50 each!$150!


use term "Self-insure"


18


To insure herself vb buys the shirts and a hedging portfolio as follows:

1. Instead of buying 3 shirts for $50 each she buys only 2, saving $50.

2. The buyer, vb , adds $30 of her own money and lends the resulting $80 at rate r = 1.25.


Make sure you point out that the cummulative actions of buying the shirts and the hedging portfolio describe the actions that follow.


19


On Success:

– vb obtains $100 from the loan and buysthe 3rd shirt

On failure:

– vb sells the two shirts for $25 each

– gets $100 from the loan. – She obtains a total of $150

Thus, vb can insure herself for $30.


20

Outline

• Motivation



• Future Work



Now the lower bound


21

Selling References


define:- K, the prize- C, the premiumand describe what happensdon't forget to state what p and q are.


22

Selling References

Seen as an investment…

On Success the ROI is:

On failure the ROI is:

If repeated many times the insurer may go bankrupt. Assume the insurer has W dollars available to insure this transaction.

K

C

K

CK

1

K

C


describe insurer's point of viewRead "Return On Investment"use "Gambler's Ruin" for motivating transition.


23

Selling References

Insurer maximizes the expected value of the growth rate of capital (Kelly Criterion).

For given:– probability of failure p,– a desired growth rate of capital R; and,– fraction of the total funds W being risked in a transaction.

The insurer can obtain a lower bound on the premium C.

nn

W

WER

1

0

log


24

Selling References

Insured Value as a fraction of total funds – f

Co

st/In

sure

d V

alu

e –

C/K

Minimum Return/Risk Ration for Different Failure Probabilities


25

Outline

• Motivation



• Future Work



26

A Non-Exploitable Strategy

Two Scenarios:• No False Claims - NFC• With False Claims - FC

False claims only change the probability p.We can incorporate the cost of verification.

Key Idea:

Save part of the money obtained in successful transactions in excess of the opportunity cost.


Say en passant that the insurer now also has to do due diligence.Say that we "FUND" the strategy using key idea.


27


Example.

The buyer, vb, has $190 to spend on 1 of 3 options:

1. Buying 3 shirts from an unknown seller for $50 each and insuring the transaction for $40. She values each shirt at $100.

2. Buying 2 pairs of shoes from a reliable retailer for $70 each. She thinks each pair is worth $90.

3. Buying 1 game console for $150, from a reliable online shop. She values the console at $240.


Make sure the audience understands the example. I think it pays off to take more time on this slide than on the next one. They need to understand the difference between the price paid and the valuation.


28


vb’s valuation for each of the 3 options is:

1. Shirts: 100 x 3 + 0 (no cash leftover) = $300

2. Pairs of Shoes: 90 x 2 + 50 (cash) = $230

3. Console: 240 x 1 + 40 (cash) = $280

Gains in excess of the opportunity cost are:300-280=$20.

Part of these $20 should be saved to insure future transactions.


Make the comment that the $20 were made because the online seller selling the shirts "exists". If he did not exist those $20 would be gone.


29


The Strategy:

1. Initially only provide references to known agents or those that leave a security deposit.

2. Insure all trade through references provided by trusted agents.

3. Do not provide more insurance than you can recover. Charge at least the lower bound for providing a reference.

4. Save part of the money received “in excess of the opportunity cost”.


This slide and the next are "the meat" of the paper.Describe each of the items.


30


150

150100

50

50

50

OK!$10 saved to

provide future insurance 10

Failed!Payment made

automatically by v1



finalize rolex watch example.


31

Outline

• Motivation



• Future Work



32

Future Work

• Simulation– sensitivity to estimates of p– growth rate of capital– dynamic behavior

• Price Negotiation– should avoid “double spending” problem– fair distribution among insurers of the premium

paid


33

Outline

• Motivation



• Future Work



34

Conclusion

TrustDavis provides:

• Accurate Ratings

• Non-exploitable strategy for honest agents

• Pseudonym change tolerance

• Decentralized infrastructure

Through the use of References.


be VERY brief, you've said this before.


35

Conclusion

Key Ideas:

• Incentive Compatibility– Incentive to accurately rate– Incentive to insure– No incentive to change pseudonym

• Saving gains in excess of the opportunity cost to insure future transactions.


be brief.


36

The End

Questions?

Thank you!

{defigueiredo,etbarr}@ucdavis.edu

TrustDavis: A Non-Exploitable Online Reputation System

Documents

barr computer science

dimitri defigueiredo

centralized authorityhow

riskthird parties

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multiple identities

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