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Buyer feedback as a filtering mechanism for reputable sellers

Author

Listed:
  • Paolo Laureti
  • Frantisek Slanina
  • Yi-Kuo Yu
  • Yi-Cheng Zhang

Abstract

We propose a continuum model for the description of buyer and seller dynamics in an Internet market. The relevant variables are the research effort of buyers and the sellers' reputation building process. We show that, if a commercial web-site gives consumers the possibility to rate credibly sellers they bargained with, vendors are forced to be more honest. This leads to mutual beneficial symbiosis between buyers and sellers; the overall enhanced volume of transactions contributes ultimately to the web-site, which facilitates the matchmaking service.

Suggested Citation

  • Paolo Laureti & Frantisek Slanina & Yi-Kuo Yu & Yi-Cheng Zhang, 2002. "Buyer feedback as a filtering mechanism for reputable sellers," Papers physics/0207020, arXiv.org.
  • Handle: RePEc:arx:papers:physics/0207020
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    Cited by:

    1. Gabuthy, Yannick & Jacquemet, Nicolas & Marchand, Nadège, 2008. "Does resorting to online dispute resolution promote agreements? Experimental evidence," European Economic Review, Elsevier, vol. 52(2), pages 259-282, February.
    2. Laureti, Paolo & Moret, Lionel & Zhang, Yi-Cheng, 2005. "Aggregating partial, local evaluations to achieve global ranking," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 345(3), pages 705-712.

    More about this item

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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