Money Talks: Rebate Mechanisms in Reputation System Design

• 成果类型: Article
• 署名作者: Li, Lingfang (Ivy); Xiao, Erte
• 署名单位: Fudan University; Carnegie Mellon University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2013.1848
• 发表日期: 2014
• 页码: 2054-2072
• 关键词: Reputation; trust; Feedback mechanism; asymmetric information; public good; Experimental economics

摘要

Reputation systems that rely on voluntary feedback from traders are important in creating and sustaining trust in markets. Feedback nevertheless is a public good, and providing it is often costly. We combine theory with a laboratory experiment to study the effect of a seller precommitment mechanism: Sellers have an option to commit by providing a rebate to reduce the buyer's feedback reporting cost before making purchasing decisions. Our theory predicts that this mechanism induces noncooperative sellers to cooperate in the listed-price market. Using a buyer-seller trust game with a unilateral feedback scheme, we find that the seller's rebate decision has a significant impact on the buyer's purchasing decision via signaling the seller's cooperative type. More importantly, market efficiency under the precommitment mechanism increases with the probability that sellers will provide a rebate. Compared with the no rebate mechanism market, more efficient trades can be achieved when the sellers offer a rebate to the buyers in the market with the rebate mechanism, even when the rebate does not cover the full cost of feedback reporting.