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DDI study level documentation for study 10.7802/2676 Replication files: Building a reputation for trustworthiness: Experimental evidence on the role of the feedback rate Replication files: Building a reputation for trustworthiness: Experimental evidence on the role of the feedback rate Replication files: Building a reputation for trustworthiness: Experimental evidence on the role of the feedback rate 10.7802/267610.7802/267610.7802/267610.7802/2676 Przepiorka, Wojtek Przepiorka, Wojtek Jiao, Ruohuang Jiao, Ruohuang Buskens, Vincent Buskens, Vincent [China Scholarship Council [grant no. 201707720047]] GESIS Data Archive for the Social SciencesGESIS Datenarchiv für Sozialwissenschaften reputationlaboratory experimentcooperationconfidencereputationlaboratory experimentcooperationconfidence The published Stata syntax files (do-files) and data can be used to replicate the results reported in the cited article. <u>Abstract of the journal article: </u> In 25 years, research on reputation-based online markets has produced robust evidence on the existence of the so-called reputation effect, i.e. the positive relation between online traders’ reputations and these traders’ market success in terms of sales and prices. However, there is an ongoing debate on what the size of the reputation effect means. We argue that the rate of truthful feedback that traders leave after completed transactions is negatively related to the size of the reputation effect. The higher the rate of truthful feedback, the quicker will untrustworthy traders be screened and disincentivized to enter the market. With mostly trustworthy traders entering the market, buyers will demand smaller price discounts from market entrants without a good reputation. We test this mechanism empirically in two laboratory experiments. In both experiments, we systematically vary the probability with which information about sellers’ behavior in an economic trust game is recorded and shown to future interaction partners of these sellers. In the second experiment, we introduce competition among sellers by allowing buyers to choose one of two sellers in each interaction. We find that sellers give discounts to buyers to build or repair their reputation and that sellers who give discounts or have a good reputation are trusted more. However, we do not find support for our hypothesis that a higher feedback rate significantly decreases sellers’ propensity to give discounts. We argue and show in exploratory analyses that this is likely due to the high level of unconditional trust buyers exhibit towards sellers without a reputation. Yet, seller competition increases the propensity to offer discounts among sellers without a reputation the most.The published Stata syntax files (do-files) and data can be used to replicate the results reported in the cited article. <u>Abstract of the journal article: </u> In 25 years, research on reputation-based online markets has produced robust evidence on the existence of the so-called reputation effect, i.e. the positive relation between online traders’ reputations and these traders’ market success in terms of sales and prices. However, there is an ongoing debate on what the size of the reputation effect means. We argue that the rate of truthful feedback that traders leave after completed transactions is negatively related to the size of the reputation effect. The higher the rate of truthful feedback, the quicker will untrustworthy traders be screened and disincentivized to enter the market. With mostly trustworthy traders entering the market, buyers will demand smaller price discounts from market entrants without a good reputation. We test this mechanism empirically in two laboratory experiments. In both experiments, we systematically vary the probability with which information about sellers’ behavior in an economic trust game is recorded and shown to future interaction partners of these sellers. In the second experiment, we introduce competition among sellers by allowing buyers to choose one of two sellers in each interaction. We find that sellers give discounts to buyers to build or repair their reputation and that sellers who give discounts or have a good reputation are trusted more. However, we do not find support for our hypothesis that a higher feedback rate significantly decreases sellers’ propensity to give discounts. We argue and show in exploratory analyses that this is likely due to the high level of unconditional trust buyers exhibit towards sellers without a reputation. Yet, seller competition increases the propensity to offer discounts among sellers without a reputation the most. NetherlandsNetherlands University students and employees Non-probability Sample - Availability SampleNon-probability Sample - Availability Sample Laboratory experimentExperiment.LaboratoryLaborexperimentExperiment.Laboratory Free access (without registration) - The research data can be downloaded directly by anyone without further limitations. CC BY-NC-ND 4.0: Attribution - NonCommercial – NoDerivatives (https://creativecommons.org/licenses/by-nc-nd/4.0/deed.de)Freier Zugang (ohne Registrierung) - Die Forschungsdaten können von jedem direkt heruntergeladen werden. CC BY-NC-ND 4.0: Attribution - NonCommercial – NoDerivatives (https://creativecommons.org/licenses/by-nc-nd/4.0/deed.de) http://dbkapps.gesis.org/dbkoai/oai.asp oai:dbk.gesis.org:SDN/10.7802_2676 2024-02-22 ddi:codebook:2_5