Tobias J. Klein (University of Mannheim, Department of Economics, 68131 Mannheim, Germany. klein@econ.uni-mannheim.de) Christian Lambertz (University of Mannheim, Department of Economics, 68131 Mannheim, Germany. lambertz@econ.uni-mannheim.de) Giancarlo Spagnolo (Consip, Stockholm School of Economics, and C.E.P.R. giancaspagnolo@yahoo.com) Konrad O. Stahl (University of Mannheim, Department of Economics, 68131 Mannheim, Germany; C.E.P.R., CESifo, and ZEW. kos@econ.uni-mannheim.de)
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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 behavior 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 be low. 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, most likely 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 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 in its series Discussion Papers with number
62.
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