NEW MECHANISM DESIGN IN THE C2C ONLINE REPUTATION EVALUATION OPTIMIZING

Yi Yang, Wenjun Zhu, Xiliang Zhang

Abstract

In view of the assumption of the trader’s bounded rationality, our research analyzed the defects of current reputation evaluation mechanism and the trust problem in the online trade. The mechanism was redesigned from the three aspects of the evaluation process, the accounting method of the reputation-limit and reputation rating scores, then, the system of "tell the truth" has been added to the mechanism to realize the improvement of incentive function in evaluation mechanism. In order to prove the effectiveness of the new mechanism, an algorithm example was given based on the sequential game analysis and Harsanyi transformation of the bounded rationality trader’s decision-making. The results show that the new mechanism can effectively provide the decision-making information for the trading parties in the process of reputation evaluation, and encourage both parties of evaluation to select the "tell the truth" strategy achieving the maximum reputation score.

References

  1. Ariely, D., Itamar, S., 2003. Buying, Bidding, Playing or Competing? Value Assessment and Decision Dynamics in Online Auctions. Journal of Consumer Psychology, 13, pp: 113-123.
  2. Bark, A., Bloch, N., 2006. Factors Related to Perceived Helpfulness in Supporting Highly Distressed Individuals through an Online Support Chat. Cyber Psychology & Behavior, pp: 60-68.
  3. Cabral Luis M. B., Hortacsu Ali, 2004. The Dynamics of Seller Reputation: Theory and Evidence from eBay. NBER Working Paper No. W10363. March, Available at SSRN: http://ssrn.com/abstract=516704.
  4. Chris Snijders, Richard Zijdeman, 2004. Reputation and Internet Auctions: eBay and Beyond. Analyse & Kritik 26. pp: 158-184.
  5. Christina Aperjis, Ramesh Johari, 2010. Designing Reputation Mechanisms for Efficient Trade. Available at SSRN: http://ssrn.com/abstract=1596839.
  6. Chrysanthos Dellarocas, F. Dini and G. Spagnolo,2006a. Designing Reputation (Feedback) Mechanisms. Handbook of Procurement, Cambridge University Press.
  7. Chrysanthos Dellarocas, 2006b. Reputation Mechanisms, in Hendershott, T. (Eds.): Handbook on Economics and Information Systems. Elsevier Publishing. New York, pp: 629-660.
  8. Chrysanthos Dellarocas, 2001. Building Trust On-Line, The Design of Reliable Reputation Reporting , Mechanisms for Online Trading Communities. MIT Sloan School of Management. Sloan Working Paper Jan-80.
  9. Chrysanthos Dellarocas, 2006c. How Often Should Reputation Mechanisms Update a Trader's Reputation Profile? Information Systems Research, pp: 1-32.
  10. Dahui Li, Zhangxi Lin, 2004. Negative Reputation Rate as the Signal of Risk in Online Consumer-to-consumer Transactions. Proceedings of ICEB, 2004.
  11. Dongmin Kim, Izak Benbasat, 2003. Trust-related Arguments in Internet Stores: A Framework for Evaluation. Journal of Electronic Commerce Research, VOL. 4, NO. 2, pp: 49-64.
  12. Hitoshi Yamamoto, Kazunari Ishida, Toshizumi Ohta, 2004. Trust Formation in a C2C Market: Effect of Reputation Management System. In: Proceedings of The Workshop on Deception, Fraud and Trust in Agent Societies at The Third International Joint Conference on Autonomous Agents and Multi-Agent Systems (AAMAS-2004). New York, pp: 126-136.
  13. Jennifer Brown, John Morgan, 2006. Reputation in Online Markets: Some Negative Feedback [EB/OL]. http: // are.berkeley.edu/.
  14. Jeffrey, A. L., 2005. How valuable is good reputation? A Sample Selection Model of Internet Auctions. The Review of Economics and Statistics. 87(3), pp: 453- 465.
  15. Kamins, M., Xavier, D., Valerie, S. F., 2004. Effects of Seller-supplied Prices on Buyers' Product Evaluations: Reference Prices in an Internet Auction Context. Journal of Consumer Research. 30(4), pp: 622-628.
  16. Mikhail, I. M., James, A., 2002. Dose a seller's ecommerce reputation matter? Evidence from EBay Auctions. The Journal of Industrial Economics. (3), pp: 337-349.
  17. On, A., Dan, A., 2002. E-rationality: Rationality in Electronic Environments? Advances in Consumer Research. pp: 261-262.
  18. Peris, R., Gimeno, M. A., Pinazo, D., et al, 2002. Online Chat Rooms: Virtual Spaces of Interaction for Socially Oriented People. Cyber Psychology & Behavior. pp: 43-51.
  19. Simon H., 1955. A Behavioral Model of Rational Choice. Quarterly Journal of Economics. pp: 99-18.
  20. Qing Wang, Yong Zhao, 2009. A Bounded Rationality Revealed Preference and Satisfying Decision Analysis. Journal of Hua zhong University of Science and Technology(Nature Science Edition). (8), pp: 5-7.
  21. Yi Yang, Jinbao Qian, 2007. Analysis on the Influence of Online Auction Result on Bidders' Mental Accounting: An Empirical Research from Kongfz Secondhand Book Net. Economic Management. (6), pp: 43-47.
  22. Yi Yang, Xiliang Zhang, Jinbao Qian, 2009. Behavior of Competitors Online Auctions: Overview and Prospect. Economic Perspectives. (1), pp: 86-89.
Download


Paper Citation


in Harvard Style

Yang Y., Zhu W. and Zhang X. (2011). NEW MECHANISM DESIGN IN THE C2C ONLINE REPUTATION EVALUATION OPTIMIZING . In Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 4: ICEIS, ISBN 978-989-8425-56-0, pages 53-62. DOI: 10.5220/0003486800530062


in Bibtex Style

@conference{iceis11,
author={Yi Yang and Wenjun Zhu and Xiliang Zhang},
title={NEW MECHANISM DESIGN IN THE C2C ONLINE REPUTATION EVALUATION OPTIMIZING},
booktitle={Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 4: ICEIS,},
year={2011},
pages={53-62},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0003486800530062},
isbn={978-989-8425-56-0},
}


in EndNote Style

TY - CONF
JO - Proceedings of the 13th International Conference on Enterprise Information Systems - Volume 4: ICEIS,
TI - NEW MECHANISM DESIGN IN THE C2C ONLINE REPUTATION EVALUATION OPTIMIZING
SN - 978-989-8425-56-0
AU - Yang Y.
AU - Zhu W.
AU - Zhang X.
PY - 2011
SP - 53
EP - 62
DO - 10.5220/0003486800530062