3.1.3 Analytic studies

A game-theoretic model of eBay’s mechanism was presented in the symposium [32]. The analysis concluded that eBay’s mechanism is capable of inducing high (but not perfect) levels of cooperation and that the unusually low fraction of negative feedback on eBay is a natural consequence of equilibrium behavior. Furthermore, it investigated the impact of incomplete feedback submission and easy name changes and concluded that (i) eBay’s mechanism can be more efficient in the presence of incomplete feedback submission if it treats missing feedback as positive feedback and (ii) one approach for discouraging players from changing their identities is to start new players with a profile that corresponds to “bad reputation” and have them “pay their dues” at the initial phase of the game. An earlier paper, not presented at the conference, showed that no other approach can be significantly better even when there is complete submission of feedback: distrust of newcomers through a “paying your dues” equilibrium is an inherent social cost of systems with easy name changes (Friedman and Resnick, 2001).

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About Paul Resnick

Professor, University of Michigan School of Information Personal home page
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