2019
DOI: 10.1111/1756-2171.12297
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Reputation and adverse selection: theory and evidence from eBay

Abstract: How can a marketplace introduce mechanisms to overcome inefficiencies caused by adverse selection? In this article, I use a unique data set that follows eBay sellers to show that reputation is a major determinant of price variations. I develop a model of sellers' dynamic behavior where sellers have heterogeneous qualities unobservable by buyers. Using reputation as a signal of quality, I structurally estimate the model to uncover buyers' utility and sellers' costs and underlying qualities. I show that removing… Show more

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Cited by 31 publications
(8 citation statements)
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“…Reputation is often considered a creditable signalling mechanism (Miller and del Carmen Triana, 2009;Shahid et al, 2021), offering an ex ante signal to the principals of the robustness and quality of the agent's provision (Saeedi, 2019). It can be attained through several means, such as certification (Gugerty, 2009) as in the case of fairtrade products (De Pelsmacker et al, 2005) and market communication (Nyagadza et al, 2021), but also through consistent delivery of targets over a substantive period (Herbig et al, 1994), as well as other locational, place-based factors (Samuel et al, 2022).…”
Section: Social Enterprise Reputation and Economic Performancementioning
confidence: 99%
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“…Reputation is often considered a creditable signalling mechanism (Miller and del Carmen Triana, 2009;Shahid et al, 2021), offering an ex ante signal to the principals of the robustness and quality of the agent's provision (Saeedi, 2019). It can be attained through several means, such as certification (Gugerty, 2009) as in the case of fairtrade products (De Pelsmacker et al, 2005) and market communication (Nyagadza et al, 2021), but also through consistent delivery of targets over a substantive period (Herbig et al, 1994), as well as other locational, place-based factors (Samuel et al, 2022).…”
Section: Social Enterprise Reputation and Economic Performancementioning
confidence: 99%
“…Reputation is often considered a creditable signalling mechanism (Miller and del Carmen Triana, 2009; Shahid et al. , 2021), offering an ex ante signal to the principals of the robustness and quality of the agent’s provision (Saeedi, 2019). It can be attained through several means, such as certification (Gugerty, 2009) as in the case of fairtrade products (De Pelsmacker et al.…”
Section: Social Enterprise Reputation and Economic Performancementioning
confidence: 99%
“…One of the principal reasons why trust and reputation are important is their impact on the economic aspects of marketplaces. On clearnet marketplaces, it is well established that marketplaces that use reputation systems have higher quality sellers, more competitive prices, and higher seller profits (Saeedi, 2019). On these platforms, a seller's reputation has a positive impact on the price of goods (Diekmann et al., 2014; Fan et al., 2016; Houser & Wooders, 2006).…”
Section: Prior Literaturementioning
confidence: 99%
“…• Fitur ulasan penjual pada e-marketplace merupakan penentu utama variasi harga. Di mana variasi harga merupakan seleksi nyata antar penjual untuk dapat menarik pembeli [20]. Berdasarkan 12 penelitian terdahulu tersebut, penulis menemukan 50 indikator yang kemudian akan dijabarkan dalam pernyataan kuisioner pada penelitian ini.…”
Section: Kajian Pustaka a Perspektif Pembeli Terhadap E-marketplaceunclassified