Sunday, May 3, 2009

On the reputation economy

The internet economy doesn't run on cash.

That is to say, the market economy does reach online, but it is not the primary mode of transaction here. Instead, we primarily have a reputation economy: your wealth is your fame. It works a little differently: in a market economy, you show your appreciation by giving someone money, which makes you poorer. In the reputation economy, you link to them, which doesn't.

People understand this instinctively, if not always consciously. If you steal a bit of artwork someone else made, and put it on your site with a link to the creator, the creator is unlikely to get mad (and unlikely to get sympathy from the rest of the internet if they do). On the other hand, if instead of linking back to the creator, you imply that you made it, people get very angry; see Todd Goldman or eBaum's World [explicit lyrics] for examples. This is a pattern on the internet—if people are complaining about someone being a thief, they're much more likely to mean a reputation thief than a money thief.

Interestingly, there's no Wikipedia article on the subject, although I don't seem to be the first one to describe it. There is one for "attention economy", which is close, but not quite the same thing.