Remain silent and ye shall suffer: seller exploitation of reticent buyers in an experimental reputation system
By providing incentives for sellers to act in a trustworthy manner, reputation mechanisms in many online environments can mitigate moral-hazard problems when particular buyers and sellers interact infrequently. However, these mechanisms rely on buyers sharing their private information about sellers with the community, and thus may suffer from too little feedback when its provision is costly. In this experimental study, we compare a standard feedback mechanism to one in which sellers can inspect a buyer's feedback-provision history, thus providing the buyer with incentives to share private information even when costly. We find fairly high trust and trustworthiness levels in all markets, with buyers showing a willingness to provide costly feedback, especially negative feedback, sufficient to induce seller trustworthiness. While we find, ceteris paribus, evidence that the availability of feedback-provision histories increases buyer trust by reducing missing feedback, it did not improve overall trustworthiness as this information enabled sellers to discriminate and act in a trustworthy manner less frequently with those who share information less frequently.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 14 (2011)
Issue (Month): 2 (May)
|Contact details of provider:|| Web page: http://www.springer.com|
More information through EDIRC
|Order Information:||Web: http://www.springer.com/economics/economic+theory/journal/10683/PS2|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simon Gachter & Ernst Fehr, 2000.
"Cooperation and Punishment in Public Goods Experiments,"
American Economic Review,
American Economic Association, vol. 90(4), pages 980-994, September.
- Ernst Fehr & Simon Gaechter, 1999. "Cooperation and Punishment in Public Goods Experiments," CESifo Working Paper Series 183, CESifo Group Munich.
- Ernst Fehr & Simon Gaechter, . "Cooperation and Punishment in Public Goods Experiments," IEW - Working Papers 010, Institute for Empirical Research in Economics - University of Zurich.
- Steffen Huck & Gabriele K. Ruchala & Jean-Robert Tyran, 2006.
"Competition Fosters Trust,"
06-22, University of Copenhagen. Department of Economics.
- Robert S. Gazzale & Tapan Khopkar, 2008.
"Remain Silent and Ye Shall Suffer: Seller Exploitation of Reticent Buyers in an Experimental Reputation System,"
Department of Economics Working Papers
2008-22, Department of Economics, Williams College.
- Robert Gazzale & Tapan Khopkar, 2011. "Remain silent and ye shall suffer: seller exploitation of reticent buyers in an experimental reputation system," Experimental Economics, Springer;Economic Science Association, vol. 14(2), pages 273-285, May.
- James Andreoni & John H Miller, 1997.
"Rational Cooperation in the finitely repeated prisoner's dilemma: experimental evidence,"
Levine's Working Paper Archive
670, David K. Levine.
- Andreoni, James A & Miller, John H, 1993. "Rational Cooperation in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence," Economic Journal, Royal Economic Society, vol. 103(418), pages 570-85, May.
- Andreoni, J. & Miller, J.H., 1991. "Rational Cooperative in the Finitely Repeated Prisoner's Dilemma: Experimental Evidence," Working papers 9102, Wisconsin Madison - Social Systems.
- Gary E. Bolton & Elena Katok & Axel Ockenfels, 2003.
"How Effective are Electronic Reputation Mechanisms? An Experimental Investigation,"
Working Paper Series in Economics
3, University of Cologne, Department of Economics.
- Gary E. Bolton & Elena Katok & Axel Ockenfels, 2004. "How Effective Are Electronic Reputation Mechanisms? An Experimental Investigation," Management Science, INFORMS, vol. 50(11), pages 1587-1602, November.
- Resnick, Paul & Zeckhauser, Richard & Swanson, John & Lockwood, Kate, 2003.
"The Value of Reputation on eBay: A Controlled Experiment,"
Working Paper Series
rwp03-007, Harvard University, John F. Kennedy School of Government.
- Paul Resnick & Richard Zeckhauser & John Swanson & Kate Lockwood, 2006. "The value of reputation on eBay: A controlled experiment," Experimental Economics, Springer;Economic Science Association, vol. 9(2), pages 79-101, June.
- Michi Kandori, 2010. "Social Norms and Community Enforcement," Levine's Working Paper Archive 630, David K. Levine.
- Engelmann, Dirk & Fischbacher, Urs, 2009.
"Indirect reciprocity and strategic reputation building in an experimental helping game,"
Games and Economic Behavior,
Elsevier, vol. 67(2), pages 399-407, November.
- Dirk Engelmann & Urs Fischbacher, 2008. "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," TWI Research Paper Series 34, Thurgauer Wirtschaftsinstitut, Universitï¿½t Konstanz.
- Dirk Engelmann & Urs Fischbacher, . "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," IEW - Working Papers 132, Institute for Empirical Research in Economics - University of Zurich.
- Dirk Engelmann & Urs Fischbacher, 2003. "Indirect Reciprocity and Strategic Reputation Building in an Experimental Helping Game," CERGE-EI Working Papers wp215, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
- Erte Xiao & Daniel Houser, 2005. "Emotion expression in human punishment behavior," Experimental 0504003, EconWPA, revised 18 May 2005.
- Iris Bohnet & Heike Harmgart & Steffen Huck & Jean-Robert Tyran, 2005. "Learning Trust," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 322-329, 04/05.
- Bolton, Gary E. & Katok, Elena & Ockenfels, Axel, 2005. "Cooperation among strangers with limited information about reputation," Journal of Public Economics, Elsevier, vol. 89(8), pages 1457-1468, August.
- Robert Gazzale, 2005. "Giving Gossips Their Due: Information Provision in Games with Private Monitoring," Game Theory and Information 0508002, EconWPA.
- Li, Lingfang (Ivy) & Xiao, Erte, 2010. "Money Talks? An Experimental Study of Rebate in Reputation System Design," MPRA Paper 22401, University Library of Munich, Germany.
- Chrysanthos Dellarocas & Charles A. Wood, 2008. "The Sound of Silence in Online Feedback: Estimating Trading Risks in the Presence of Reporting Bias," Management Science, INFORMS, vol. 54(3), pages 460-476, March.
- Jeffrey Ely & Jusso Valimaki, 2002.
NajEcon Working Paper Reviews
- Dellarocas, Chrysanthos, 2003. "The Digitization of Word-of-mouth: Promise and Challenges of Online Feedback Mechanisms," Working papers 4296-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Nikos Nikiforakis, 2004.
"Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?,"
Royal Holloway, University of London: Discussion Papers in Economics
04/05, Department of Economics, Royal Holloway University of London, revised Apr 2004.
- Nikos Nikiforakis, 2004. "Punishment and Counter-punishment in Public Goods Games: Can we still govern ourselves?," Experimental 0403001, EconWPA.
- Iris Bohnet & Steffen Huck, 2004.
"Repetition and Reputation: Implications for Trust and Trustworthiness When Institutions Change,"
CREMA Working Paper Series
2004-09, Center for Research in Economics, Management and the Arts (CREMA).
- Iris Bohnet & Steffen Huck, 2004. "Repetition and Reputation: Implications for Trust and Trustworthiness When Institutions Change," American Economic Review, American Economic Association, vol. 94(2), pages 362-366, May.
- Chrysanthos Dellarocas, 2003. "The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms," Management Science, INFORMS, vol. 49(10), pages 1407-1424, October.
- Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 2002. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Journal of Economic Theory, Elsevier, vol. 104(1), pages 16-47, May.
- Jeffrey Carpenter, 2002.
"The Demand for Punishment,"
Middlebury College Working Paper Series
0243, Middlebury College, Department of Economics.
- Johnson, Eric J. & Camerer, Colin & Sen, Sankar & Rymon, Talia, 1998. "Detecting Failures of Backward Induction: Monitoring Information Search in Sequential Bargaining," Working Papers 1040, California Institute of Technology, Division of the Humanities and Social Sciences.
- Lingfang (Ivy) Li, 2010. "Reputation, Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 303-331, 06.
- David Kreps & Robert Wilson, 1999.
"Reputation and Imperfect Information,"
Levine's Working Paper Archive
238, David K. Levine.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
- M.A. Nowak & K. Sigmund, 1998. "Evolution of Indirect Reciprocity by Image Scoring/ The Dynamics of Indirect Reciprocity," Working Papers ir98040, International Institute for Applied Systems Analysis.
- Michihiro Kandori, 1992. "Social Norms and Community Enforcement," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 63-80.
- Selten, Reinhard & Stoecker, Rolf, 1986. "End behavior in sequences of finite Prisoner's Dilemma supergames A learning theory approach," Journal of Economic Behavior & Organization, Elsevier, vol. 7(1), pages 47-70, March.
- Bakos, Yannis & Dellarocas, Chrysanthos, 2003. "Cooperation Without Enforcement? A comparative analysis of litigation and online reputation as quality assurance mechanisms," Working papers 4295-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
When requesting a correction, please mention this item's handle: RePEc:kap:expeco:v:14:y:2011:i:2:p:273-285. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.