[color:"orange"]The owner becomes hostile & tries to kill you.[/color]
Obviously, then, a reputation system can not be based entirely on honesty. Different groups may value one virtue over others (even to a large extent), but I don't think you could reasonably exclude everything else.
I said 'trustworthiness' not 'honesty'. A spy, for example, would be considered trustworthy by his employers if he always comes through for them, but his job requires a massive amount of lying so obviously he cannot be described as honest.
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[color:"orange"]Isn't that really what the Larians are talking about though? A world with most or all major decisions being 'least worst' or 'shades of grey' is going to have to be morally neutral, because you otherwise get punished whatever you do.[/color]
If there is no right or wrong, then there are also no moral dilemma. It is also not a dilemma if there is a choice with no down side, so there has to be punishment whatever you do. The trick is to try to determine which option gives the best results with the least damage, from a selection of fairly evenly matched choices.
The whole point of the dilemma of pushing a fat man over a bridge is whether or not you can justify the murder of an innocent person in order to save lives. If murder isn't wrong, then the dilemma is reduced to a simple math problem.
There can be morally difficult or debatable situations, but that does not require the entire moral system to be neutral.
The dilemma is there for the player, not the character. If you consider most RPGs, the 'hero'is usually a mass-murderer who goes around massacring entire tribes of people based almost entirely on racial prejudice (Orc = evil) with no attempt made to sort things out peacefully or even to determine if there is a right or wrong to the situation beyond 'my species is always right'.
In the real world, I doubt many of us would consider this 'good' behaviour <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />
But we judge our character's actions partly by the standards of his/her world (Orc = evil) and partly by the standards of our own (Just about everything more complex than Orc = evil). So even in a game world where 'good' and 'evil' are not considered to exist as such and everything is about survival, we will still apply our own values to each situation regardless.
Even when we play an evil character, we play him/her to our own idea of what constitutes 'evil' <img src="/ubbthreads/images/graemlins/smile.gif" alt="" />