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THE DYNAMICS OF SELLER REPUTATION: EVIDENCE FROM EBAY -super-

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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. Copyright 2010 The Authors. Journal compilation 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

Suggested Citation

  • Luís Cabral & Ali Hortaçsu, 2010. "THE DYNAMICS OF SELLER REPUTATION: EVIDENCE FROM EBAY -super-," 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
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    6. Chou, Chien-fu & Shy, Oz, 1990. "Network effects without network externalities," International Journal of Industrial Organization, Elsevier, vol. 8(2), pages 259-270, June.
    7. Clements, Matthew T., 2004. "Direct and indirect network effects: are they equivalent?," International Journal of Industrial Organization, Elsevier, vol. 22(5), pages 633-645, May.
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