 The Effect of Reputation on Selling Prices in AuctionsChristian Grund and Oliver Gürtler Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2008, vol. 228, issue 4, 345-356 Abstract: It is often argued in economics that building a reputation for trustworthiness could help individuals or firms to mitigate or even overcome problems of contractual incompleteness. In this paper, we use data from the German eBay website to test whether a seller’s bad reputation has an effect on selling prices. For auctions of popular DVDs at eBay we do indeed find evidence for this hypothesis. We show that an increase in the share of negative ratings of one percentage point decreases the selling price by about 4 per cent. The number of negative ratings, in contrast, does not affect the selling price significantly. Hence, bidders on the eBay marketplace seem to concentrate on relative rather than on absolute measures of reputation. Further, we challenge the recommendation that it is profitable for eBay sellers to let their auction end in the evening, when many potential buyers are supposed to be online. We find that prices are relatively lower in the evening. This may be due to a much higher supply of DVDs in the evening. Keywords: Auction; eBay feedback system; reputation; trustworthiness (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:228:y:2008:i:4:p:345-356 Access Statistics for this article Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) is currently edited by Peter Winker More articles in Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik) from De Gruyter |
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