Reputation on eBay worth 8% more

Posted by Marshall on July 10, 2006 | Link It

Howard Rheingold of SmartMobs (who I also write for) posted about a new metric / measurement -  and I might be possible to put into a spreadshet to say …."if your reputation is good and you have these many backlinks/requests …your price per item is X but if your reputation is poor your price per item ought to be Y.

"A new paper by Paul Resnick presents evidence that a good reputation is worth about 8% more, as reflected by the price of identical goods, for sellers with a good reputation on eBay (the full paper is published in Experimental Economics):

The source of the information comes from Science Daily.

"The study is the first known randomized controlled look at the value of eBay reputations in the natural setting of actual eBay auctions. The findings showed that eBay’s feedback system—the cornerstone of the online auction site—works as it should, by rewarding sellers who have more positive feedback.

The study, "The Value of Reputation on eBay: A Controlled Experiment," is available online in the journal Experimental Economics. It was co-written by Resnick, Richard Zeckhauser of Harvard University, graduate student Kate Lockwood and eBay seller John Swanson.

Surprisingly, the researchers found that one or two negative feedbacks did not hurt new sellers, but it remains unclear why buyers are willing to cut new sellers with negative feedback a little slack.

They offer several explanations, but Resnick said it’s likely that buyers are leery of new sellers no matter what the feedback.

"Either way, they aren’t trusted," he said. "



1 Response

These are the current comments for "Reputation on eBay worth 8% more"

07/11/06 @ 4:56 pm

I think that holds true for non-online selling as well. In fact, a good personal and professional reputation might be worth a lot more in B2B selling!

Interesting stuff, Marshall…



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