Reputation Systems
Digital reputation systems create artificial versions of the memory and repeated interaction that sustain vampire bat cooperation.
Vampire bat colonies don't collapse from cheating because bats remember who shares. Cheaters get ostracized. On their next hunting failure, they starve. This is tit-for-tat: cooperate with cooperators, punish cheaters.
Vampire bats use individual recognition and memory. A bat remembers: Has this individual shared with me before? Have I shared with them? Did they cheat when they had the chance? This memory enables tit-for-tat: cooperate with cooperators, defect against defectors. The strategy works because of four conditions: interactions repeat (same bats encounter each other night after night), players remember past behavior (bats recognize individuals and recall sharing history), future benefits exceed immediate gains (surviving multiple hunger streaks is worth more than hoarding one night's blood), and cheating gets punished (defectors lose access to cooperation and starve).
Business Application of Reputation Systems
Digital reputation systems create artificial versions of the memory and repeated interaction that sustain vampire bat cooperation. Public, permanent feedback makes cheating visible; the cost of reputational damage exceeds the gain from cheating; and the four conditions for tit-for-tat (future value, public memory, costly reputation rebuilding, high detection probability) enable trust among strangers at massive scale.