Feedback mechanisms that allow partners to rate each other after a transaction are considered crucial for the success of anonymous internet trading platforms. We document an asymmetry in the feedback behaviour on eBay, propose an explanation based on the micro structure of the feedback mechanism and the time when feedbacks are given, and support this explanation by findings from a large data set. Our analysis implies that the informational content of feedback records is likely to below. The reason for this is that agents appear to leave feedbacks strategically. Negative feedbacks are given late, in the "last minute", or not given at all, because of the fear of retaliative negative feedback. Conversely, positive feedbacks are given early in order to encourage reciprocation. Towards refining our insights into the observed pattern, we look separately at buyers and sellers, and relate the magnitude of the effects to the trading partners' experience.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
5693.
Tobias J. Klein & Christian Lambertz & Giancarlo Spagnolo & Konrad O. Stahl, 2005.
"Last Minute Feedback,"
Discussion Papers
62, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich, revised Mar 2006.
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Find related papers by JEL classification: D44 - Microeconomics - - Market Structure and Pricing - - - Auctions L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
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