[kylebrown]

When arbitrators/escrow-agents compete on fees, it drives fees lower as they attempt to undercut each other. That makes retirement attacks more likely (do a bunch of honest biz to get a good rating with the intention to get a big payoff from a final "score"). Its similar to the tragedy of the commons worries about miner revenue from transaction fees.

I think the better model is a more "decentralized oracle" design, perhaps something like TrustDavis or TruthCoin. With these "choose your arbitrator/oracle" market designs, it's a never ending game of distrust and whack-a-mole.

[c-darwin]

It will be difficult to get a dishonest reputation, because statistics gives the information on miners (http://en.dcoinwiki.com/Miner). A buyer and a seller should trust the same arbitrators. Which means that each and every arbitrator should earn not only buyers' trust but sellers' too. Eventually, I think, there will be a few respectful artbitrators, and most of buyers and majority of sellers will trust them.

[bmh_ca]

Indeed. Where any real amounts of money are involved, unwary arbitrators can offer their services below the cost of insurance.