Revisiting feedback systems: Trust building in digital markets

Data from ebay.com online auctions were used to examine the impact of buyer feedback and other trust-evoking variables on the final auction prices realized by sellers. Direct counts of positive and negative feedback were found to influence ending auction price significantly. However, when difference measures between positive and negative feedback were used as buyer feedback measures, no significant price effects were found. Since much more positive, than negative, feedback is obtained by sellers, the marginal impact of negative feedback is much greater than that of positive feedback. Therefore, subtracting negative feedback counts from positive feedback counts may not be appropriate. Support was also found for other factors, such as product warranties, impacting final auction prices.