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Online
vs
Offline Markets
Online
vs Offline Markets
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Offline Markets have closed boundaries whereas OnlineM^
k t
Markets are open
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Incentive for Shared Reputation not clear in Online marketeBay in the early days vs noweBay in the early days vs now
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Existence of Negative Reputation and Positive Reputation
Positive reputation is more effective in solving the“lemons” problem (Kollock ‘99)dishonest agents can move to a different market withoutpaying penalty or exit/entrace costpaying penalty or exit/entrace cost
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Stability of Identity
dishonest agents can change identity
Yamagishi
Experiments
Yamagishi
Experiments
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Conclusions•^
Information Asymmetry leads to lemon markets•^
Lower quality goods are traded and opportunity forhi h
lit^
d
higher quality goods gone
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Reputation alleviates lemon markets where tradersidentities are permanent
p
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Power of reputation reduced by identity changesand/or cancel reputationsN^
ti^
t ti
l^
bl^
t^
id^
tit^
h
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Negative reputation vulnerable to identity changeswhere positive reputation is not vulnerable to it
•^
Properly designed reputation mechanismProperly designed reputation mechanismshould resolve lemons problem
eBay FeedbackeBay
Feedback
•^
HistoryBefore 1999Before 1999
Anybody could leave feedback for anybody Now
Feedbacks are per-transaction between seller and winning bidderFeedbacks are per transaction between seller and winning bidder
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AccumulativePositive (+1), Negative (-1), Neutral(0)1 line of qualitative textual feedback
q
•^
Feedback Profile is publicAny prospective buyer can see all per-transaction feedback with scores
and text F^
db k 2 0
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Feedback 2.0Revealed on multiple aspects of the user feedback
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TodayOnly buyers can leave feedbacks sellers can only leave positiveOnly buyers can leave feedbacks, sellers can only leave positive
feedbacks
eBay FeedbackeBay
Feedback
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Most Feedbacks are positive (Pollyanna
p^
(^
y
effect)•^
Negatives are fewer
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Fear of retaliation
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Satisfaction of receipt
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No Feedbacks instead
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Positive with text specifying negative experiences
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High courtesy Equilibrium (Resnick/Zeckhauser ’01)
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Mutually negative feedbacks may represent misplaced blame
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Mutually negative feedbacks may represent misplaced blame
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Who goes first?•^
Since buyer typically pays first, expect seller to go first
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Buyer goes first twice as often (Resnick/Zeckhauser ’01)
Analysis of Feedback Text
(Sundaresan et al
Expression/SentimentExpression/Sentiment •^
Expression is a metaphor for Trust
•^
When Trust is expressed through feedback ortextual communication it influences mutual Trustand future Trust
•^
Factors to take into accountWh
ll
What a user usually saysWhat is the change in what the user usually saysHow does what someone says affects what the next user says
y^
y
Only those who have significantly significant things to say do say
anything at all
