The effects of more transparency on the behavior of doctors, and sellers on eBay
A recent piece by The Economist suggests that medical doctors treat patients better when they in turn have the possibility to share their experiences online. This is exactly what my co-authors Christian Lambertz, Konrad Stahl and I find in a recent paper we have written on the effects of market transparency on eBay (we finished revising it last week). We argue and show that improving the design of the reputation mechanism on eBay allowed buyers to share negative experiences without the fear of retaliation, and therefore seller behavior improved. The design was improved by changing the main rating system. We compare seller behavior after that change to the one before. What we find particularly nice and what we exploit in our paper is that there was a second rating system in place in which buyers evaluated seller, and which was actually not changed at the same time.