From the paper:
In our system, authors gain reputation when the edits they perform to Wikipedia articles are preserved by subsequent authors, and they lose reputation when their edits are rolled back or undone in short order.A fun demo of the technique is available that colors the text of some Wikipedia articles based on the reputation of the authors, providing some measure of how trustworthy particular passages of text might be.
Most reputation systems are user-driven: they are based on users rating each other's contributions or behavior ... In contrast, ... [our] system ... requires no user input ... authors are evaluated on the basis of how their contributions fare.
A content-driven reputation system has an intrinsic objectivity advantage over user-driven reputation systems. In order to badmouth (damage the reputation of) author B, an author A cannot simply give a negative rating to a contribution by B. Rather, to discredit B, A needs to undo some contribution of B, thus running the risk that if subsequent authors restore B's contribution, it will be A's reputation, rather than B's, to suffer, as A's edit is reversed. Likewise, authors cannot simply praise each other's contributions to enhance their reputations: their contributions must actually withstand the test of time.
It is curious how this simple but clever technique seems less susceptible to gaming. I was trying to think of ways the system could be manipulated -- Would people retaliate for having their edits reversed? Would they make lots of non-controversial but useless edits to increase their reputation? -- but these and other obvious attacks seem like they might have a fairly high risk of damaging your own reputation as people caught on and reversed the changes.
I also was trying to think how this might be applied elsewhere. For example, on eBay, rather than have sellers and buyers rate each other with inane things like "A++++!", perhaps eBay seller reputation could be determined instead by how often the transaction is reversed? What if eBay implemented a 30-day unconditional return policy on all transactions, then reported buyer reputation based on payment rate and seller reputation based on return rate?