Rating Systems…How Should We Use Them?

Is that single number a reflection of reality?

Rating Systems are Everywhere but can they be trusted?

I’m currently reading this book “Sifferdjur : hur siffrorna styr våra liv”. It is written in Swedish but has been translated into Traditional Chinese by a publisher in Taiwan. The title when translated (by ChatGPT) to English is “Do you have a numbers obsession? Math, data, performance, algorithms — how numbers control our everyday lives.” You can see why I had to get the book and read it! Thank you, Singapore bilingual policy! I highly recommend this book if you can read Traditional Chinese and Swedish.

This issue is inspired by the fascinating insights from the book, sparking a deeper dive into rating systems. As businesses strive to boost their ratings, these systems are becoming increasingly influential, shaping decisions and behaviors on a global scale. They’ve transformed into a driving force, creating a world where both consumers and businesses are fixated—sometimes obsessively—on that all-important number.

How so? As a consumer, when was the last time you chose a restaurant without looking at its rating on Google Maps or Yelp? As a business, especially in Singapore, are you not obsessed with THE numbers on Yelp, TripAdvisor, and Google Maps…just to name a few.

Warning

When aggregated across numerous inputs, rating systems have a strong potential to reflect reality. However, they should never be the sole basis for making decisions.

The numbers we obsess over—those simple, digestible figures—are condensed snapshots of reality. Why condensed? Because humans naturally grasp numbers; we all intuitively know that 3.7 is greater than 2.5. Take, for example, the rating you see for a hotel on a travel site. That single number is an average, a distillation of all the ratings submitted, whether they were given three years ago or just last year. It’s a shorthand summary of how all reviewers, over time, have felt about that hotel.

Now that we understand ratings as condensed snapshots of reality, how should we approach them in practice?

The key is not to rely solely on the number when making decisions. Instead, treat it as a filter to narrow down your options. For instance, when choosing a hotel for a vacation, you might rule out all options rated below 3.8. From there, it’s about factoring in your personal preferences—whether it’s proximity to a convenience store or transit station, soft pillows, or sparkling clean bathrooms.

Ratings should act as a compass, guiding us toward possibilities worth exploring, not as the final decision-maker. Even when two cafes have nearly identical ratings, we instinctively look beyond the number. We delve deeper to unpack what aspects of the rating truly matter and assess whether those dimensions align with what’s important to us. It’s about using ratings to enhance our choices, not define them.

Do not get too obsessed with ratings as it is a condensed reality. It needs to be further unpacked to determine if an entity is suitable. :)

What are your thoughts? Share them in the comments below.

I wrote a thought experiment on how I will set up an AI Governance Committee, i.e. what areas of knowledge and expertise I want to have. Have a read here and again I invite your perspectives and sharing. <Blog Post>

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