Reputation in the Long-Run

Arbeitspapier

Feedback scores in an online marketplace have risen sharply over time, leading to substantial top-censoring. Some of the increase is explained by more satisfied raters, but at least 35-45% is attributable to raters applying lower standards. We show that this “reputation inflation” is the equilibrium outcome of a model in which (a) inferences made by future trading partners determine what constitutes “bad” feedback and (b) giving “bad” feedback is costly to raters. The introduction of a new feedback system confirms our model predictions: raters were candid when feedback was private, but when feedback suddenly became public, reputations began inflating.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6750

Classification and Topics

• Classification: Wirtschaft

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Filippas, Apostolos ; Horton, John ; Golden, Joseph M.
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/173026