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

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  • Kusterer, David
  • Bolton, Gary
  • Mans, Johannes

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.

Suggested Citation

  • Kusterer, David & Bolton, Gary & Mans, Johannes, 2016. "Inflated Reputations Uncertainty, Leniency & Moral Wiggle Room in Trader Feedback Systems," VfS Annual Conference 2016 (Augsburg): Demographic Change 145794, Verein für Socialpolitik / German Economic Association.
    • Handle: RePEc:zbw:vfsc16:145794
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    More about this item

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D47 - Microeconomics - - Market Structure, Pricing, and Design - - - Market Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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