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The value of reputation on eBay: A controlled experiment

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Abstract

We conducted the first randomized controlled field experiment of an Internet reputation mechanism. A high-reputation, established eBay dealer sold matched pairs of lots—batches of vintage postcards—under his regular identity and under 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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Authors and Affiliations

  1. School of Information, University of Michigan, USA

    Paul Resnick

  2. Kennedy School, Harvard University and Harvard Business School, USA

    Richard Zeckhauser

  3. Johnninaswanson, eBay, and Mission Viejo, California

    John Swanson

  4. Northwestern University, USA

    Kate Lockwood

Authors
  1. Paul Resnick
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  2. Richard Zeckhauser
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  3. John Swanson
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  4. Kate Lockwood
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JEL Classification D82 · L14 · Z13

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Resnick, P., Zeckhauser, R., Swanson, J. et al. The value of reputation on eBay: A controlled experiment. Exp Econ 9, 79–101 (2006). https://doi.org/10.1007/s10683-006-4309-2

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  • DOI: https://doi.org/10.1007/s10683-006-4309-2

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