Abstract
We experimentally studied the effects of a eBay-style self-reporting reputation mechanism in an double-sided exchange economy in which participants have the option of not fulfilling their contracts. We found that submitted reports quite accurately reflected their transactions and this mechanism maintaining a high contract fulfillment rate. The inaccurate reports, which were about 5% of the total, were heavily biased towards bad ratings when the transaction is successful. This is strong evidence that the inaccurate reports were not results of random errors, but derived from an underlying behavior effect. Our experimental design allowed identifying the effect of reputation mechanism on endogenous market behavior.
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
References
Klein, D.B. (ed.): Reputation: Studies in the Voluntary Elicitation of Good Conduct. Univ. of Michigan Press, Ann Arbor (1997)
Axelrod, R., Hamilton, W.: The evolution of cooperation. Science 211, 1390–1396 (1981)
Dejong, D.V., Forsythe, R., Lundholm, R.J.: Ripoffs, lemons and reputation formation in agency relationships: A laboratory market study. J. of Finance XL, 809–820 (1985)
Dellarocas, C.: Analyzing the economic efficiency of eBay-like online reputation reporting mechanisms. In: Proc. of the 3rd ACM Conf. on Electronic Commerce (EC 2001), pp. 171–179 (2001)
Chen, K.Y., Hogg, T., Wozny, N.: Experimental study of market reputation mechanisms. In: Proc. of the 5th ACM Conference on Electronic Commerce (EC 2004), pp. 234–235. ACM Press, New York (2004)
Keser, C.: Experimental games for the design of reputation management systems. IBM Systems Journal 42, 498–506 (2003)
Bolton, G.E., Katok, E., Ockenfels, A.: How effective are online reputation mechanisms? Technical report (2002)
Smith, V.L.: Bargaining and Market Behavior: Essays in Experimental Economics. Cambridge Univ. Press, Cambridge (2000)
Tadelis, S.: The market for reputations as an incentive mechanism. SIEPR Policy Paper 01-001, Stanford (2001)
Huberman, B.A., Franklin, M., Hogg, T.: Enhancing privacy and trust in electronic communities. In: Proc. of the ACM Conference on Electronic Commerce (EC 1999), pp. 78–86. ACM Press, New York (1999)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2005 Springer-Verlag Berlin Heidelberg
About this paper
Cite this paper
Chen, KY., Hogg, T. (2005). Experimental Evaluation of an eBay-Style Self-reporting Reputation Mechanism. In: Deng, X., Ye, Y. (eds) Internet and Network Economics. WINE 2005. Lecture Notes in Computer Science, vol 3828. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11600930_43
Download citation
DOI: https://doi.org/10.1007/11600930_43
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-30900-0
Online ISBN: 978-3-540-32293-1
eBook Packages: Computer ScienceComputer Science (R0)