Experimental Economics

, Volume 9, Issue 2, pp 79-101

First online:

The value of reputation on eBay: A controlled experiment

  • Paul ResnickAffiliated withSchool of Information, University of Michigan
  • , Richard ZeckhauserAffiliated withKennedy School, Harvard University and Harvard Business School
  • , John SwansonAffiliated withJohnninaswanson, eBay, and Mission Viejo
  • , Kate LockwoodAffiliated withNorthwestern University

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We conducted the first randomized controlled field experiment of an Internet reputation mechanism. A high-reputation, established eBay dealer sold matched pairs of lots—batches of vintage postcards—under his regular identity and under new seller identities (also operated by him). As predicted, the established identity fared better. The difference in buyers’ 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 buyers’ willingness-to-pay.


Field experiment eBay Reputation