A rating system for AEC e-bidding that accounts for rater credibility

Until recently e-commerce providers asserted how they would “ revolutionize the way construction professionals conduct their business”. In April 2000 approximately $1 Billion had been invested in around 200 Architecture Engineering Construction (AEC) industry electronic commerce start-ups. In reality, the amount of transactions conducted in these new electronic market places turned out to be very low, and only a handful of them were still in business in February 2002. One possible cause of the AEC industry’s slow adoption of electronic commerce is the lack of trust in the participants in electronic marketplaces. Electronic markets facilitates the search for new business partners, but AEC General Contractors, subcontractors, and suppliers are unlikely to do business with firms that are unknown to them. One solution to this problem is the creation of a rating system that gathers and displays information about the past performance of the market participants. The most well-known e-commerce rating system belongs to eBay, the largest and most successful Internet Auction provider, enabling transactions between private parties. eBay currently (Feb 2002) has over 30 million registered users. eBay’s users buy and sell items that are varied, and often difficult to describe as well as evaluate. Trust is therefore a prerequisite for the transactions on eBay to take place. To foster trust, eBay has created a system by which the market participants rate each other after each transaction. eBay’s success makes it interesting to investigate whether a rating system could support trust also in AEC emarkets. The eBay rating system is simple and intuitive to use. The problem is that all ratings weigh the same, implying that the system is built on the assumption that all raters are equally credible and trustworthy. This assumption may be valid in C2C auctions but we doubt that it applies to complex B2B transactions, such as AEC bidding. More sophisticated electronic commerce rating solutions have been developed incorporating features such as multiple criteria (e.g., Bizrate), network of trust (e.g., epinions.com) and sophisticated statistical analysis (openratings.com). However, we argue that none of these solutions directly addresses the problems facing an AEC electronic market, being either overly simple (ebay and Bizrate), or