Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237315 
Year of Publication: 
2021
Series/Report no.: 
ECONtribute Discussion Paper No. 070
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
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.
Subjects: 
dispute resolution system
market design
reputation
trust
JEL: 
C73
C9
D02
L14
Document Type: 
Working Paper

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