The Value of Reputation on eBay: A Controlled Experiment | Zendy

Paul Resnick | Zendy; Richard Zeckhauser | Zendy; John Swanson | Zendy; Kate Lockwood | Zendy

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The Value of Reputation on eBay: A Controlled Experiment

Author(s) -

Paul Resnick,

Richard Zeckhauser,

John Swanson,

Kate Lockwood

Publication year - 2003

Publication title -

ssrn electronic journal

Language(s) - English

Resource type - Journals

ISSN - 1556-5068

DOI - 10.2139/ssrn.385206

Subject(s) - reputation , guitar , observational study , value (mathematics) , outcome (game theory) , population , empirical research , business , advertising , economics , internet privacy , marketing , actuarial science , microeconomics , computer science , statistics , mathematics , demography , political science , law , management , sociology

We conducted the first randomized controlled study of an Internet reputation mechanism. A high-reputation, established eBay dealer sold matched pairs of items -- batches of vintage postcards -- under his regular identity and new seller identities (also operated by him). As predicted, the established identity fared better. The difference in buyers' willingness-to-pay was 8.1% of the selling price. A subsidiary experiment followed the same format, but compared sales by relatively new sellers with and without negative feedback. Surprisingly, one or two negative feedbacks for our new sellers did not affect buyers' willingness-to-pay.

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