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Reputation and Certification in Online Shops

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Author Info

  • Franz Hackl
  • Agnes Kügler

    (Institute for Economic Policy and Industrial Economics, Vienna University of Economics and Business, Austria)

  • Rudolf Winter-Ebmer

Abstract

We investigate the impact of self-organized reputation versus certification by an independent institution on demand for online shops. Using data from a large Austrian price comparison site, we show that quality seals issued by a credible and independent institution increase demand more than feedback-based reputation. This result is important for markets where the market-maker must deal with issues of asymmetric information concerning the quality of goods and services in the market.

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File URL: http://www.econ.jku.at/papers/2011/wp1116.pdf
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Bibliographic Info

Paper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2011-16.

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Length: 23 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:jku:econwp:2011_16

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Related research

Keywords: online markets; search engines; signaling; certification; reputation;

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References

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  1. Lu�S Cabral & Ali Horta�Su, 2010. "THE DYNAMICS OF SELLER REPUTATION: EVIDENCE FROM EBAY -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 54-78, 03.
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  4. Angrist, Joshua D. & Guryan, Jonathan, 2008. "Does teacher testing raise teacher quality? Evidence from state certification requirements," Economics of Education Review, Elsevier, vol. 27(5), pages 483-503, October.
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  7. Luis Cabral & Ali Hortacsu, 2006. "The Dynamics of Seller Reputation: Evidence from eBay," Working Papers 06-32, New York University, Leonard N. Stern School of Business, Department of Economics.
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  17. Shapiro, Carl, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, MIT Press, vol. 98(4), pages 659-79, November.
  18. Auriol, Emmanuelle & Schilizzi, Steven, 2003. "Quality Signaling through Certification. Theory and an Application to Agricultural Seed Market," IDEI Working Papers 165, Institut d'Économie Industrielle (IDEI), Toulouse.
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