Experimental Economics

, Volume 9, Issue 2, pp 79–101 | Cite as

The value of reputation on eBay: A controlled experiment

  • Paul Resnick
  • Richard Zeckhauser
  • John Swanson
  • Kate Lockwood
Article

Abstract

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.

Keywords

Field experiment eBay Reputation 

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Copyright information

© Economic Science Association 2006

Authors and Affiliations

  • Paul Resnick
    • 1
  • Richard Zeckhauser
    • 2
  • John Swanson
    • 3
  • Kate Lockwood
    • 4
  1. 1.School of InformationUniversity of MichiganUSA
  2. 2.Kennedy SchoolHarvard University and Harvard Business SchoolUSA
  3. 3.Johnninaswanson, eBay, and Mission Viejo
  4. 4.Northwestern UniversityUSA

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