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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26094
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| Title: | The Dynamics of Seller Reputation: Evidence from eBay |
| Authors: | Cabral, Luis
Hortacsu, Ali |
| Keywords: | quality
reputation
auctions
eBay |
| Issue Date: | Mar-2006 |
| Series/Report no.: | EC-06-32 |
| Abstract: | We construct a panel of eBay seller histories and examine the importance
of eBay’s reputation mechanism. We find that, when a seller first
receives negative feedback, his weekly sales rate drops from a positive
7% to a negative 7%; subsequent negative feedback ratings arrive 25%
more rapidly than the first one and don’t have nearly as much
impact as the first one. We also find that a seller is more likely to
exit the lower his reputation is; and that, just before exiting, sellers
receive more negative feedback than their lifetime average. We consider
a series of theoretical models and measure them against these empirical
results. Regardless of which theoretical model best explains the data,
an important conclusion of our paper is that eBay’s reputation
system gives way to noticeable strategic responses from both buyers and sellers. |
| URI: | http://hdl.handle.net/2451/26094 |
| Appears in Collections: | Economics Working Papers
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