Despite their effectiveness, they are vulnerable to rating fraud, a phenomenon wherein raters benefit themselves by creating biased ratings (Cai and Zhu 2015; Mayzlin et al. 2014).
The limitation that ratings can only be submitted after completing transactions increases the cost of rating fraud.
"I estimate that, over a period of ten years, Iran lost $3 billion to $5 billion annually from this kind of exchange-rate fraud," says Saeed Laylaz, an economist, now with Iran's biggest carmaker.
However, it is vulnerable to rating fraud.
In Effectiveness of Blockchain on Rating Fraud section, we discuss the effectiveness of blockchain technology on rating fraud.
This study explores the rating fraud by differentiating the subjective fraud from objective fraud.
In addition to privacy concerns, another important reason for rating fraud is seeking inappropriate profits.
This study discusses the potential strengths and limitations of blockchain-based reputation systems under rating fraud.
Rating fraud is common in the cyber world, and some companies commit such activities.
