Fixing feedback revision rules in online markets

Gary Bolton, Kevin Breuer, Ben Greiner and Axel Ockenfels

Journal of Economics & Management Strategy, 2023, vol. 32, issue 2, 247-256

Abstract: Feedback withdrawal mechanisms in online markets aim to facilitate the resolution of conflicts during transactions. Yet, frequently used online feedback withdrawal rules are flawed and may backfire by inviting strategic transaction and feedback behavior. Our laboratory experiment shows how a small change in the design of feedback withdrawal rules, allowing unilateral rather than mutual withdrawal, can both reduce incentives for strategic gaming and improve coordination of expectations. This leads to less trading risk, more cooperation, and higher market efficiency.

Date: 2023
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https://doi.org/10.1111/jems.12512

Related works:
Working Paper: Fixing Feedback Revision Rules in Online Markets (2021)
Working Paper: Fixing feedback revision rules in online markets (2020)
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