Reputation premium and reputation management: Evidence from the largest e-commerce platform in China

• Autores: Ying Fan, Jiandong Ju, Mo Xiao
• Localización: International journal of industrial organization, ISSN 0167-7187, Vol. 46, Nº. 0, 2016, págs. 63-76
• Idioma: inglés
• Texto completo no disponible (Saber más ...)
• Resumen

  • Abstract We study the life-cycle effects of reputation using a panel data set consisting of a 25% random sample of all sellers on China's largest e-commerce platform, Taobao.com. We find a substantial return to reputation, but only for established sellers. New sellers, in contrast, lower their prices to boost transaction volume and ratings. This reputation management by new sellers leads to a decrease in their revenue in the short run and even a decrease in their business' survival likelihood in the longer run. We show that such differential effects at different stages of a seller's business life-cycle can arise when the effect of reputation on future payoffs dominates that on current payoffs.