Reputation and e-commerce: EBay auctions and the asymmetrical impact of positive and negative ratings

Abstract

This analysis explores the impact and nature of reputation as related to e-commerce by looking at the importance of a seller's reputational rating on the final bid price associated with eBay auctions. Positive reputational ratings emerged as mildly influential in determining final bid price. However, negative reputational ratings emerged as highly influential and detrimental. Thus, we find strong evidence for the importance of reputation when engaging in e-commerce and equally strong evidence concerning the exaggerated influence of negative reputation. © 2001 Elsevier Science Inc.