Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252079 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9562
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Online ratings play an important role in many markets. We study the often disputed information content of these ratings, by proposing a reduced-form Bayesian model of the typical buyer's rating decision. Our empirical evidence based on eBay raw data is in line with even intricate predictions from it. We thus have good reasons to calibrate the model to moments of the data. Our simulations suggest that the rating record reveals the seller's type after about 100 transactions, or 65-70 ratings.
Subjects: 
online markets
rating
reputation
JEL: 
D83
L12
L13
L81
Document Type: 
Working Paper
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