Unlike some of my friends and family I’m not a heavy user of online auctions, and although I have an account on eBay my reputation as a seller or buyer doesn’t really matter that much to me. At the moment I’ve got 100% positive feedback but the number of transactions is so small that it doesn’t really signify.
However heavy sellers and those who make a substantial proportion of their income from the site care deeply about the reports they get from other buyers and sellers.
Their concerns about negative feedback are well-grounded: in 2002 Paul Resnick and his colleagues did a proper randomised control experiment to assess the value of an eBay reputation, looking to see how much people would bid for articles from sellers with different scores. They found that sellers with established reputations can expect about 8 per cent more revenue than new sellers marketing the same goods.
