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• W1480456461 abstract "We propose a basic theoretical model of eBay's reputation mechanism, derive a series of implications and empirically test their validity. Our theoretical model features both adverse selection and moral hazard. We show that when a seller receives a negative rating for the first time his reputation decreases and so does his effort level. This implies a decline in sales and sale price; and an increase in the rate of arrival of subsequent negative feedback. Our model also suggests that sellers with worse records are more likely to exit (and possibly re-enter under a new identity), whereas, better sellers have more to gain from 'buying a reputation' by building up a record of favourable feedback through purchases rather than sales. Our empirical evidence, based on a panel dataset of seller feedback histories and cross-sectional data on transaction prices collected from eBay, is broadly consistent will all of these predictions. An important conclusion of our results is that eBay's reputation system gives way to strategic responses from both buyers and sellers." @default.
• W1480456461 created "2016-06-24" @default.
• W1480456461 creator A5006705660 @default.
• W1480456461 creator A5034200249 @default.
• W1480456461 date "2004-03-01" @default.
• W1480456461 modified "2023-10-06" @default.
• W1480456461 title "The Dynamics of Seller Reputation: Theory and Evidence from Ebay" @default.
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• W1480456461 hasPublicationYear "2004" @default.
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