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The Retaliatory Feedback Problem: Evidence from eBay and a Proposed Solution
Abstract
Online auctions are an increasingly popular avenue for completing electronic transactions. Many online auction sites use some type of reputation (feedback) system—where parties to a transaction can rate each other. However, retaliatory feedback threatens to undermine these systems. Retaliatory feedback occurs when one party in a transaction believes that the other party will leave them a negative feedback if they do the same. This chapter examines data gathered from E-Bay in order to show that retaliatory feedback exists and to categorize the problem. A simple solution to the retaliatory feedback problem—feedback escrow—is described.
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