The value of reputation on eBay: A controlled experiment
We conducted the first randomized controlled field experiment of an Internet reputation mechanism. A high-reputation, established eBay dealer sold matched pairs of lotsâ€”batches of vintage postcardsâ€”under his regular identity and under new seller identities (also operated by him). As predicted, the established identity fared better. The difference in buyersâ€™ willingness-to-pay was 8.1% of the selling price. A subsidiary experiment followed the same format, but compared sales by relatively new sellers with and without negative feedback. Surprisingly, one or two negative feedbacks for our new sellers did not affect buyersâ€™ willingness-to-pay. Copyright Economic Science Association 2006
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