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17 2021 12:30 - 13:45
Webinar

Applied Microeconomics

When and Why Do Buyers Rate in Online Markets?


Konrad Stahl (University of Mannheim)

Abstract


Anonymous markets would be very difficult to successfully operate without the possibility that buyers rate the seller. Yet many empirical results yield that ratings are biased since non-random and concentrating on extreme experiences. We endogenize rating decisions within a model in which the buyer is willing to share publicly her opinion about transaction if its realized quality differs much from the quality expected by her, where expected quality is influenced by an aggregate of past buyers' ratings of the seller. The probability that a public rating signal is given is state dependent. We demonstrate our results empirically using raw data from eBay. In spite of the non-randomness of responses, unweighted rating aggregates appear to rather well reflect reported buyer experience as long as expectations are not extreme.

 

for further information please contact sara.picciallo@unibocconi.it