Inflated Reputations Uncertainty, Leniency & Moral Wiggle Room in Trader Feedback Systems

David Kusterer, Gary Bolton () and Johannes Mans

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: Reputation systems associated with Internet markets are known to be subject to strategic manipulation. The experiment we present suggests that this manipulation can extend to factors that have heretofore been overlooked: the leniency and moral wiggle room that arise from uncertainty about the source of transaction problems. Uncertainty about seller culpability leads to behaviors that reduce the informativeness of the feedback system, thereby diminishing the incentives for honest seller behavior. Under uncertainty, buyers pay about the same prices but get significantly less.

JEL-codes: C90 D47 D83 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-exp
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