When and Why Do Buyers Rate in Online Markets?

Xiang Hui, Tobias Klein and Konrad Stahl

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Anonymous markets would be very difficult to successfully operate without the possibility that buyers rate the seller. Yet many empirical results yield that ratings are non-random and concentrate on extreme experiences. We develop a model of rating decisions in which the buyer is willing to share publicly her opinion about a transaction, if its realized quality differs much from the quality expected by her, where expected quality is influenced by an aggregate of the seller’s past ratings. We demonstrate our results empirically using raw data from eBay. In spite of the non-randomness of responses, unweighted rating aggregates appear to rather well reflect reported buyer experience as long as expectations are not extreme.

Keywords: Online Markets; Rating; Reputation (search for similar items in EconPapers)
JEL-codes: D83 L12 L13 L81 (search for similar items in EconPapers)
Pages: 42
Date: 2021-03
New Economics Papers: this item is included in nep-cwa
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: When and Why Do Buyers Rate in Online Markets? (2022)
Working Paper: When and Why Do Buyers Rate in Online Markets? (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2021_267v1

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