Title
Strategic behavior in online reputation systems: evidence from revoking on eBay
Abstract
AbstractThis study examines how sellers respond to changes in the design of reputation systems on eBay. Specifically, we focus on one particular strategic behavior on eBay's reputation system: sellers' explicit retaliation against negative feedback provided by buyers to coerce buyers into revoking their negative feedback. We examine how these strategic sellers respond to removal of their ability to retaliate against buyers. We utilize one key policy change of eBay's reputation system, which provides a natural experimental setting that allows us to infer the causal impact of the reputation system on seller behavior. Our results show that coercing buyers to revoke their negative feedback through retaliation enables low-quality sellers to manipulate their reputations and masquerade as high-quality sellers. We find that these sellers reacted strongly to eBay's announcement of a proposed ban on revoking. Interestingly, after the power of these strategic sellers is curtailed, we find evidence that they exert more efforts to improve their reputation scores. This study provides valuable insights about the relationship between reputation system and seller behavior, which have important implications for the design of online reputation mechanisms.
Year
DOI
Venue
2014
10.25300/MISQ/2014/38.4.05
Periodicals
Keywords
Field
DocType
Reputation mechanisms,online ratings,quality transparency,online auctions
Reputation system,Advertising,Computer science,Strategic behavior,Knowledge management,Marketing,Key policy,Reputation
Journal
Volume
Issue
ISSN
38
4
0276-7783
Citations 
PageRank 
References 
0
0.34
0
Authors
3
Name
Order
Citations
PageRank
Shun Ye1274.23
Guodong (Gordon) Gao245527.90
Siva Viswanathan332729.10