Reputation and Internet Auctions: eBay and Beyond [Snijders and Zijdeman, 2004] 1

Introduction Real auction vs. Online auction The issue of trust Reputation systems Different studies, different findings 2

Trust Four elements -Placing trust provides trustee with resources -Trustor is better off placing trust -Placing trust is voluntarily and without safeguards -Time lag between placing trust and honouring it 3

Trust: seller characteristics Reputation can improve trust, 3 assumptions: 1.Winning buyer always provides feedback after sale 2.This feedback should be honest 3.Seller behaviour should be stable over time 4

Trust: seller characteristics Reputation assumptions not realistic because: -Harder to give negative feedback, danger of retaliation -Possible to give positive feedback when negative is appropriate -Behaviour is not stable over time -As reputation increases incentive to behave correctly decreases 5

Trust: buyer and product characteristics Buyer: Experience with prior transactions Product: Trustor needs more certainty with risky products Value of products Used or new Photo Packaging Still depends on trust in description or seller 6

Contextual factors Auction characteristics: Payment methods Bidding increment/reserve price Shipment costs Auction time Site characteristics: Reputation Fees 7

Remarkable results of other studies Sometimes reputation score negatively correlated with selling price Results are very diverse 8

Research reproduced Mobile phones 4 sites: Ricardo.nl, eBay, ePier, XQL 9

Results Reproduction of results did not lead to same results: Different variables in data Different opperationalization of reputation score in data Different products under study Some research did not account for heteroscedasticity. Ater doing so, a small ans significant effect for reputation score on selling price was found. 10

Recomendations … for selling a product: Picture Function description Experience vs no experience Used vs new 11

Discussion More variables Account for different operationalizations of reputation score Think about different products under study Difference between used and new products Account for difference between sites 12

On-line Reputation Systems: The Effects of Feedback Comments and Reactions on Building and Rebuilding Trust in On-line Auctions [Sonja Ulz, Uwe Matzat, Chris Snijders] 13

(Re)building trust Majority of eBay users read at least 1 page of feedback about a seller Noise: Differences between actual and intended outcomes due to unintended errors 14

Trust violation Competence-based violation Morality based violation 15

Experiment 2 Scenarios Broken product Delayed delivery 3 types of feedback Denial Apology No feedback 16

Discussion Other ways of building trust Do these results hold for online auctions in general or are the results only for eBay? 17

Findings Perceived trustworthiness higher for less severe violations. Plain apology leads to higher trustworthiness The effect of feedback on trustworthiness are mediated by believability 18