Universität zu Köln

Bolton, Gary, Greiner, Ben and Ockenfels, Axel ORCID: 0000-0003-1456-0191 (2018). Dispute Resolution or Escalation? The Strategic Gaming of Feedback Withdrawal Options in Online Markets. Manage. Sci., 64 (9). S. 4009 - 4032. CATONSVILLE: INFORMS. ISSN 1526-5501

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Abstract

Many online markets encourage traders to make good after an unsatisfactory transaction by offering the opportunity to withdraw negative reputational feedback in a dispute resolution phase. Motivated by field evidence and guided by theoretical considerations, we use laboratory markets with two-sided moral hazard to show that this option, contrary to the intended purpose, produces an escalation of dispute. The mutual feedback withdrawal option creates an incentive to leave negative feedback, independent of the opponent's behavior, to improve one's bargaining position in the dispute resolution phase. This leads to distorted reputation information and less trust and trustworthiness in the trading phase. Buyers who refuse to give feedback strategically, even when it comes at a personal cost, mitigate the detrimental impact. It is also mitigated in markets with one-sided moral hazard and a unilateral feedback withdrawal option.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Bolton, Gary UNSPECIFIED UNSPECIFIED UNSPECIFIED Greiner, Ben UNSPECIFIED UNSPECIFIED UNSPECIFIED Ockenfels, Axel UNSPECIFIED orcid.org/0000-0003-1456-0191 UNSPECIFIED
URN:	urn:nbn:de:hbz:38-173795
DOI:	10.1287/mnsc.2017.2802
Journal or Publication Title:	Manage. Sci.
Volume:	64
Number:	9
Page Range:	S. 4009 - 4032
Date:	2018
Publisher:	INFORMS
Place of Publication:	CATONSVILLE
ISSN:	1526-5501
Language:	English
Faculty:	Faculty of Management, Economy and Social Sciences
Divisions:	Faculty of Management, Economics and Social Sciences > Economics > Macroeconomic, Financial and Economic Policy > Professur für Economics, Design and Behavior Center of Excellence C-SEB
Subjects:	Economics
Uncontrolled Keywords:	Keywords Language REPUTATION; PUNISHMENT; COOPERATION; MECHANISMS; TRUST; RECIPROCITY; AUCTIONS; BETRAYAL; AVERSION; EBAY Multiple languages Management; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/17379