Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/173026
Authors: 
Filippas, Apostolos
Horton, John
Golden, Joseph M.
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper No. 6750
Abstract: 
Feedback scores in an online marketplace have risen sharply over time, leading to substantial top-censoring. Some of the increase is explained by more satisfied raters, but at least 35-45% is attributable to raters applying lower standards. We show that this “reputation inflation” is the equilibrium outcome of a model in which (a) inferences made by future trading partners determine what constitutes “bad” feedback and (b) giving “bad” feedback is costly to raters. The introduction of a new feedback system confirms our model predictions: raters were candid when feedback was private, but when feedback suddenly became public, reputations began inflating.
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.