New Study Shows The Value of Feedback Reputation on eBay

[mandy]

"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."

download full study here (712K, .pdf format): http://www.si.umich.edu/~presnick/papers...PrePub.pdf

related topic: Experts warn against blithe belief in the veracity of eBay feedback ratings http://community.tuliptools.com/index.ph...796.0.html