Institutional Mechanisms of Trust Platformization and Reputation Capital in the Digital Economy

Abstract

The digitalization of the economy calls for a more in-depth understanding of the institutional mechanisms underlying digital platforms. While conventional approaches often view platforms as technological intermediaries that reduce transaction costs, their role extends beyond facilitating market interactions. Platforms reshape economic coordination, establish criteria for evaluating goods and users, and determine access to digital markets. This article examines the platformization of trust and reputation from the perspectives of new institutional economics and the sociology of evaluation. It shows that platforms not only reduce transaction costs but also establish standards for ranking goods, services, and economic agents. In this sense, platforms function as private regulatory environments that perform socially significant functions and shape market behavior. The study also highlights the ambivalent nature of reputational capital. Accumulated reputation can increase competitiveness and expand market opportunities, but platform control over ratings, reviews, and reputational data can also make users more dependent on platform owners. Key risks include opaque algorithmic decisions, limited opportunities to challenge them, and dependence on individual platforms. The findings point to the need for a broader approach to digital market regulation that goes beyond price-based parameters. The proposed framework includes algorithmic accountability, users’ right to review automated sanctions, and the portability of reputational data across competing platforms. These measures could strengthen the protection of economic and digital rights, reduce platform dependence, and lower barriers to switching between services.