Reputation inflation detection in a Chinese C2C market

In consumer-to-consumer (C2C) markets, sellers can manipulate their reputation by employing a large number of puppet buyers who offer positive feedback on fake transactions. We present a conceptual framework to identify the characteristics of collusive transactions based on the homo economicus assumption. We hypothesize that transaction-related indicators including price, frequency, comment, and connectedness to the transaction network, and individual-related indicators including reputation and age can be used to identify collusive transactions. The model is empirically tested using a dataset from Taobao, the largest C2C market in China. The results show that the proposed indicators are effective in identifying collusive traders.

► We present a conceptual framework to identify collusive transactions in a C2C market.
► We find transaction-based indicators can predict collusion.
► We also find individual-based factors can predict collusion.