Fixing feedback revision rules in online markets

Bolton, Gary and Breuer, Kevin and Greiner, Ben and Ockenfels, Axel (2020) Fixing feedback revision rules in online markets. Department of Strategy and Innovation Working Paper Series, 01/2020. WU Vienna University of Economics and Business, Vienna.


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Feedback withdrawal mechanisms in online markets aim to facilitate the resolution of conflicts during transactions. Yet, frequently used online feedback withdrawal rules are flawed and may backfire by inviting strategic transaction and feedback behavior. Our laboratory experiment shows how a small change in the design of feedback withdrawal rules, allowing unilateral rather than mutual withdrawal, can both reduce incentives for strategic gaming and improve coordination of expectations. This leads to less trading risk, more cooperation, and higher market efficiency.

Item Type: Paper
Keywords: dispute resolution system, market design, reputation, trust
Divisions: Departments > Strategy and Innovation > Markets and Strategy
Depositing User: Ben Greiner
Date Deposited: 07 Jan 2020 07:55
Last Modified: 07 Jan 2020 07:55


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