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Reputation and Certification in Online Shops

Author

Listed:
  • 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.

Suggested Citation

  • Franz Hackl & Agnes Kügler & Rudolf Winter-Ebmer, 2011. "Reputation and Certification in Online Shops," Economics working papers 2011-16, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2011_16
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    More about this item

    Keywords

    online markets; search engines; signaling; certification; reputation;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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