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Charity as a Substitute for Reputation: Evidence from an Online Marketplace

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  • Daniel W. Elfenbein
  • Ray Fisman
  • Brian Mcmanus

Abstract

Consumers respond positively to products tied to charity, particularly from sellers that are relatively new and hence have limited alternative means of assuring quality. We establish this result using data from a diverse group of eBay sellers who "experiment" with charity by varying the presence of a donation in a set of otherwise matched product listings. Most of charity's benefits accrue to sellers without extensive eBay histories. Consistent with charity serving as a quality signal, we find fewer customer complaints among charity-intensive sellers. Copyright , Oxford University Press.

Suggested Citation

  • Daniel W. Elfenbein & Ray Fisman & Brian Mcmanus, 2012. "Charity as a Substitute for Reputation: Evidence from an Online Marketplace," Review of Economic Studies, Oxford University Press, vol. 79(4), pages 1441-1468.
  • Handle: RePEc:oup:restud:v:79:y:2012:i:4:p:1441-1468
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    References listed on IDEAS

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