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This page contains all of the posts and discussion on MemeStreams referencing the following web page: Reputation, Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms. You can find discussions on MemeStreams as you surf the web, even if you aren't a MemeStreams member, using the Threads Bookmarklet.

Reputation, Trust, and Rebates: How Online Auction Markets Can Improve Their Feedback Mechanisms
by possibly noteworthy at 11:56 am EDT, Jul 5, 2008

Reputation systems constitute an important institution to help sustain trust in online auction markets. However, only half of buyers leave feedback after transactions, and nearly all of it is positive. In this paper, I propose a mechanism whereby sellers can provide rebates (not necessarily in monetary form) to buyers contingent upon buyers' provision of reports. Using a game theoretical model, I show how the mechanism can increase unbiased reporting. There exists a pooling equilibrium where both good and bad sellers choose the rebate option, even though their true types are revealed through feedback. The mechanism also induces bad sellers to improve the quality of the contract.


 
 
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