ASYMMETRIC INFORMATION AND RETURNS TO REPUTATION IN ONLINE AUCTIONS*

In: The Manchester School, Band 76, Heft 3, S. 336-348

Abstract

In this paper, we explore whether seller reputation can help alleviate asymmetric information in Internet online auctions, using Taiwanese data. This study reveals that the influence of seller reputations on prices is statistically significant, indicating little cultural difference in online auction behaviors, especially the attitude towards seller reputation. Although negative scores do not affect auction prices in full sample regressions, the impact of negative scores becomes statistically significant in the separated sample (low‐reputation auctions). Bidders are cautious about sellers who have not built enough reputation.