Reputation Inflation : Evidence from an Online Labor Market

@inproceedings{Horton2015ReputationI,
  title={Reputation Inflation : Evidence from an Online Labor Market},
  author={John Joseph Horton and Leonard N. Stern},
  year={2015}
}
Average public feedback scores given to sellers have increased strongly over time in an online labor market. Changes in marketplace composition or improved seller performance cannot fully explain this trend. We propose that two factors inflated reputations: (1) it costs more to give bad feedback than good feedback and (2) this cost to raters is increasing in the cost to sellers from bad feedback. Together, (1) and (2) can lead to an equilibrium where feedback is always positive, regardless of… CONTINUE READING
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