Reputation distribution and consumer-to-consumer online auction market structure: an exploratory study

The rapid growth of the consumer-to-consumer online auction market demands research into its market structure and future trends. We propose that online reputation is becoming an important indicator of online traders' business capacity in the auction market. Based on the data sampled from eBay.com, we find that seller reputation, rather than buyer reputation, is lognormally distributed. Following Gibrat's law and the theory of firm's entry and exit, we further explore the reputation data to study the dynamics of the online market. Implications of the findings are discussed.