Reputations in mixed-role markets : a theory and an experimental test
Social science research, 2020, Vol. 85, (Art. 102366), OnlineOnly
KAS, Judith, CORTEN, Rense, VAN DE RIJT, Arnout, Reputations in mixed-role markets : a theory and an experimental test, Social science research, 2020, Vol. 85, (Art. 102366), OnlineOnly - https://hdl.handle.net/1814/66060
Retrieved from Cadmus, EUI Research Repository
The traditional understanding of reputation systems is that they secure trust between strangers by publicly calling out cheaters. In modern, online markets, it is increasingly common for providers of a good to also act as consumers, and vice versa. We argue that in such mixed-role markets, reputation systems serve a second important function: They allow providers who lend out their possessions (such as their house, car or tools) to earn reputational credits that can be spent on future borrowing, especially when lending lacks monetary compensation. In an experiment that introduces a new game, "the Lending Game", we show that, consistent with our argument, information on past lending leads subjects to lend to those who have themselves lent before, increasing overall lending. However, when lending is financially compensated, this mechanism of reciprocal lending ceases to operate.
Available online 10 October 2019
Cadmus permanent link: https://hdl.handle.net/1814/66060
Full-text via DOI: 10.1016/j.ssresearch.2019.102366
ISSN: 0049-089X; 1096-0317
Publisher: Academic Press Inc Elsevier Science
Keyword(s): Reputation systems Trust Two-sided markets Experiment
Sponsorship and Funder information:
Netherlands Organization for Scientific Research (NWO) [452-16-002]
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