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I think having a solid reputation system would be a huge benefit to this game, especially the PvP element.

 

For example, during a pirate raid offering your surrender and letting them have your cargo should be a viable option if you would rather not risk your ship and instead just surrender your cargo. However, you would only consider doing that if you know the captain you are surrendering to will honor his word and let your ship go.

 

If the game had a reputation system that kept track of that sort of thing there would actually be a real incentive not to screw people over, because it goes into your reputation. Of course having a reputation as a bloodthirsty butcher who sinks anyone they fight is what some people are going to go for, but having a reputation as an honorable captain who accepts surrenders and lets you get on your way would also be beneficial, since not having to fight at all is obviously it's own reward.

 

There are other factors to a captains reputation that could come into play to facilitate other systems, such as switching nations. Your reputation could also have a loyalty score that goes up the longer you stay with a certain faction, but drops back down when you switch factions, so that people who constantly switch nations would have a very low loyalty score, thereby tipping people off that they are unlikely to stay on their side. 

 

I'm seeing reputation not just be one single measure, but sort of an array of different values. For example an "Honor" score that gives people an idea of how you deal with captains who surrender to you. The "Loyalty" score to give people an idea of whether or not you switch factions. There could also be a "Defiance" score that measures how often you've won a fight when you are attacked. There could also be a "Daring" score that keeps track of how often you successfully attack ships that have a higher battle rating than you. There could be all kinds of reputation scores like that.

 

Having a system like that could create a lot of interesting social dynamics in the game, where you can deal with people by actually talking to them, and not just by exchanging gunfire. You might be able to talk people into a surrender if you have the right reputation to convince them you'll honor the terms. You might be able to send people running in fear if you have a reputation for leaving nobody alive.

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