Last Minute Feedback

Feedback mechanisms that allow partners to rate each other after a transaction are considered crucial for the success of anonymous internet trading platforms. We document an asymmetry in the feedback behavior on eBay, propose an explanation based on the micro structure of the feedback mechanism and the time when feedbacks are given, and support this explanation by findings from a large data set. Our analysis implies that the informational content of feedback records is likely to be low. The reason for this is that agents appear to leave feedbacks strategically. Negative feedbacks are given late, in the "last minute," or not given at all, most likely because of the fear of retaliative negative feedback. Conversely, positive feedbacks are given early in order to encourage reciprocation. Towards refining our insights into the observed pattern, we look separately at buyers and sellers, and relate the magnitude of the effects to the trading partners' experience

The Actual Structure of eBay’s Feedback Mechanism and Early Evidence on the Effects of Recent Changes

eBay’s feedback mechanism is considered crucial to establishing and maintaining trust on the world’s largest trading platform. The effects of a user’s reputation on the probability of sale and on prices are at the center of a large number of studies. More recent theoretical work considers aspects of the mechanism itself. Yet, there is confusion amongst users about its exact institutional details, which also changed substantially in the last few months. An understanding of these details, and how the mechanism is perceived by users, is crucial for any assessment of the system. We provide a thorough description of the institutional setup of eBay’s feedback mechanism, including recent changes to it. Most importantly, buyers now have the possibility to leave additional, anonymous ratings on sellers on four different criteria. We discuss the implications of these changes and provide first descriptive evidence on their impact on rating behavior

Does Resorting to Online Dispute Resolution Promote Agreements? Experimental Evidence

This paper presents an experiment performed to test the properties of an innovativebargaining mechanism (called automated negotiation) used to resolve disputes arising fromInternet-based transactions. The main result shows that the settlement rule tends to chillbargaining as it creates incentives for individuals to misrepresent their true valuations, whichimplies that automated negotiation is not able to promote agreements. However, this perverseeffect depends strongly on the conflict situation. When the threat that a disagreement occurs ismore credible, the strategic effect is reduced since defendants are more interested inmaximizing the efficiency of a settlement than their own expected profit. The implications ofthese results are then used to discuss the potential role of public regulation and reputationmechanisms in Cyberspace: Online Dispute Resolution, Electronic Commerce, Bargaining, Arbitration,Experimental Economics

Transnational Consumer Law: Co-Regulation of B2C-E-Commerce

The nation states provide workable contract enforcement institutions for domestic commerce. Due to a lack of international cooperation the same does not hold true when it comes to cross-border situations. Thus, the institutional organization of international commerce is characterized by its reliance on private ordering or private legal services. Many believe that the emergence of a New Law Merchant can be observed in international commercial arbitration. This trend towards the privatization of commercial law, however, is believed to be limited to the sphere of corporate actors or merchants. When it comes to the protection of weaker contract parties like consumers, self-regulation is not held to be a viable option. In fact, consumers do shop increasingly across borders when engaging in e-commerce, often without noticing. The 1999 OECD Guidelines proposed to tackle the resulting consumer protection concerns by means of co-regulation. In this article, I intend to examine the potential role of private ordering and co-regulation in the area of cross-border consumer contracts. I start with a survey of the different mechanisms of private ordering, which have developed in e-commerce. This illustrates that electronic market places fulfil an essential role in bundling different means of private ordering into what I call transnational civil regimes for consumer protection. Finally, I aim at demonstrating how states, industry, and civil society actors can jointly contribute to the establishment of a civil constitution for such regimes

Transnational Consumer Law: Co-Regulation of B2C-E-Commerce

The nation states provide workable contract enforcement institutions for domestic commerce. Due to a lack of international cooperation the same does not hold true when it comes to cross-border situations. Thus, the institutional organization of international commerce is characterized by its reliance on private ordering or private legal services. Many believe that the emergence of a New Law Merchant can be observed in international commercial arbitration. This trend towards the privatization of commercial law, however, is believed to be limited to the sphere of corporate actors or merchants. When it comes to the protection of weaker contract parties like consumers, self-regulation is not held to be a viable option. In fact, consumers do shop increasingly across borders when engaging in e-commerce, often without noticing. The 1999 OECD Guidelines proposed to tackle the resulting consumer protection concerns by means of co-regulation. In this article, I intend to examine the potential role of private ordering and co-regulation in the area of cross-border consumer contracts. I start with a survey of the different mechanisms of private ordering, which have developed in e-commerce. This illustrates that electronic market places fulfil an essential role in bundling different means of private ordering into what I call transnational civil regimes for consumer protection. Finally, I aim at demonstrating how states, industry, and civil society actors can jointly contribute to the establishment of a civil constitution for such regimes

Last Minute Feedback

Feedback mechanisms that allow partners to rate each other after a transaction are considered crucial for the success of anonymous internet trading platforms. We document an asymmetry in the feedback behavior on eBay, propose an explanation based on the micro structure of the feedback mechanism and the time when feedbacks are given, and support this explanation by findings from a large data set. Our analysis implies that the informational content of feedback records is likely to be low. The reason for this is that agents appear to leave feedbacks strategically. Negative feedbacks are given late, in the "last minute," or not given at all, most likely because of the fear of retaliative negative feedback. Conversely, positive feedbacks are given early in order to encourage reciprocation. Towards refining our insights into the observed pattern, we look separately at buyers and sellers, and relate the magnitude of the effects to the trading partners' experience.eBay; reputation mechanism; strategic feedback behavior; informational content; reciprocity; fear of retaliation