Self-Interest, Reciprocity, and Participation in Online Reputation Systems

This paper analytically and empirically demonstrates that the expectation of reciprocal behavior from partners increases reputation system participation from self-interested eBay buyers and sellers, and develops a random effects probit model that sheds light on the drivers of feedback submission in individual transactions.

Abstract

Reputation systems are emerging as an increasingly important component of online communities, helping elicit good behavior and cooperation among loosely connected and geographically dispersed economic agents. A deeper understanding of the factors that drive voluntary online feedback contribution is crucial to the long-term viability of such systems and of the online communities that rely on them. This paper contributes in this direction by offering what we believe to be the first in-depth study of the motivations of trader participation in eBay's reputation system. To examine these questions, we analyze data from 51,452 eBay rare coin auctions. We find evidence suggesting that the high levels (50-70%) of voluntary online feedback contribution on eBay are not strongly driven by pure altruism. Rather, we analytically and empirically demonstrate that the expectation of reciprocal behavior from partners increases reputation system participation from self-interested eBay buyers and sellers. We develop a random effects probit model that sheds light on the drivers of feedback submission in individual transactions, and find that participation levels rise, then decline as users accumulate experience within the eBay community.