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Reputation and Social (Dis)approval in Feedback Mechanisms: An Experimental study

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  • Marianne Lumeau

    (University of Paris 13, CEPN and Labex ICCA, France)

  • David Masclet

    (CREM UMR CNRS 6211, Université de Rennes 1, France)

  • Thierry Pénard

    (Université de Rennes 1, CREM UMR CNRS 6211, France)

Abstract

Several studies have highlighted the role of feedback mechanisms in the success of electronic marketplaces. In this current experiment, we attempt to isolate experimentally the role of reputation and social (dis)approval associated to ratings using a trust game experiment with the opportunity to rate one’s partner (Keser, 2003; Masclet and Penard, 2012). For this purpose we compare two experimental feedback systems that differ in the information that is publically available to participants. In a first feedback system, individuals’ rating profiles are public whereas in the second feedback system this information is private. Our findings indicate that both private and public ratings improve cooperation. However, we observe that private feedbacks are less efficient in enhancing trust and trustworthiness than public systems. This is mainly due to fact that fewer ratings are assigned in the private feedback system than in the public system. Altogether these findings suggest that, even if social (dis)approval matters, publicly observed feedback remains crucial to induce honest behaviors and improve efficiency on markets characterized by imperfect information.

Suggested Citation

  • Marianne Lumeau & David Masclet & Thierry Pénard, 2013. "Reputation and Social (Dis)approval in Feedback Mechanisms: An Experimental study," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201343, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  • Handle: RePEc:tut:cremwp:201343
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    Cited by:

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    2. Josie I. Chen & Kenju Kamei, 2018. "Disapproval aversion or inflated inequity acceptance? The impact of expressing emotions in ultimatum bargaining," Experimental Economics, Springer;Economic Science Association, vol. 21(4), pages 836-857, December.
    3. Emma von Essen & Jonas Karlsson, 2019. "The effect of competition on discrimination in online markets—Anonymity and selection," PLOS ONE, Public Library of Science, vol. 14(8), pages 1-18, August.
    4. Zou, Wenbo & Wang, Jinjie & Yan, Jubo, 2022. "Online markets and trust," Journal of Economic Behavior & Organization, Elsevier, vol. 201(C), pages 395-412.
    5. Keser, Claudia & Späth, Maximilian, 2021. "The value of bad ratings: An experiment on the impact of distortions in reputation systems," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 95(C).
    6. Thang The Nguyen & Thai Quoc Cao & Huong Thi Thu Phung & Trung Tien Nguyen & Thao Thi Thanh Phan & Hiep Hung Pham, 2023. "Parents as Customers: The Influence of School Reputation on Satisfaction, Feedback, and Loyalty of Vietnamese Secondary Students’ Parents," Corporate Reputation Review, Palgrave Macmillan, vol. 26(3), pages 167-178, August.
    7. Yoshimoto, Hisayuki & Nakabayashi, Jun, 2019. "Search and resale frictions in a two-sided online platform: A case of multi-use assets," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 85-105.

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    Keywords

    Reputation; (dis)approval; Experiment; Trust Game;
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