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The Dynamics Of Seller Reputation: Evidence From Ebay

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  • LUÍS CABRAL
  • ALI HORTAÇSU

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 5% to a negative 8%; 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.

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  • Luís Cabral & Ali Hortaçsu, 2010. "The Dynamics Of Seller Reputation: Evidence From Ebay," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 54-78, March.
    • Handle: RePEc:bla:jindec:v:58:y:2010:i:1:p:54-78
    DOI: 10.1111/j.1467-6451.2010.00405.x
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