Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/129578
Authors: 
Klein, Tobias J.
Lambertz, Christian
Stahl, Konrad
Year of Publication: 
2014
Series/Report no.: 
Working Paper Series, Department of Economics, University of Mannheim 14-25
Abstract: 
We study how seller exit and continuing sellers' behavior on eBay are affected by an improvement in market transparency. The improvement was achieved by reducing strategic bias in buyer ratings. It led to a significant increase in buyer satisfaction with seller performance, but not to an increase in seller exit. When sellers had the choice between exiting—a reduction in adverse selection—and improving behavior—a reduction in moral hazard—, they preferred the latter because of lower cost. Increasing market transparency improved market outcomes.
Subjects: 
Anonymous markets
adverse selection
moral hazard
reputation mechanisms
market transparency
market design
JEL: 
D47
D83
L15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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