Reciprocity and Unveiling in Two-Sided Reputation Systems: Evidence from an Experiment on Airbnb

Andrey Fradkin (), Elena Grewal () and David Holtz ()
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Andrey Fradkin: Marketing, Boston University, Cambridge, Massachusetts 02139; MIT Initiative on the Digital Economy, MIT Sloan School of Management, Cambridge, Massachusetts 02142
Elena Grewal: Yale School of the Environment, New Haven, Connecticut 06511
David Holtz: MIT Initiative on the Digital Economy, MIT Sloan School of Management, Cambridge, Massachusetts 02142; Management of Organizations and Entrepreneurship and Innovation, Haas School of Business, University of California, Berkeley, California 94720

Marketing Science, 2021, vol. 40, issue 6, 1013-1029

Abstract: Reputation systems are used by nearly every digital marketplace, but designs vary and the effects of these designs are not well understood. We use a large-scale experiment on Airbnb to study the causal effects of one particular design choice—the timing with which feedback by one user about another is revealed on the platform. Feedback was hidden until both parties submitted a review in the treatment group and was revealed immediately after submission in the control group. The treatment stimulated more reviewing in total. This is due to users’ curiosity about what their counterparty wrote and/or the desire to have feedback visible to other users. We also show that the treatment reduced retaliation and reciprocation in feedback and led to lower ratings as a result. The effects of the policy on feedback did not translate into reduced adverse selection on the platform.

Keywords: reputation systems; field experiments; market design; digital platforms; behavioral economics (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:40:y:2021:i:6:p:1013-1029

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