Scholarly record
DOES HIGH REPUTATION LEVEL ON ELECTRONIC MARKETS REALLY MATTER?
Abstract
Reputation represented by different rating structures and mechanisms help building trust in electronic auction platforms like eBay for several years. Several studies in this field identified core benefits of such mechanisms. Results from them suggest that sellers with higher ratings are usually rewarded by higher purchasing price, than sellers with lower rating level. Reputation mechanisms are not very widely implemented on B2B (business to business) e-markets and/or on e-procurement markets. Therefore benefits identification of such reputation mechanisms on those markets is difficult. This paper's main objective is the impact analyses of reputation mechanisms on buyer's decision in e-procurement and is carried out by evaluating four research questions. First is focused on identification of the relationship (if any) between the rating level and probability of success in e-procurement. Second analyses the relationship between buyer's previous experiences with current seller and the seller's rating acquired from other market participants. Third research question is focused on the relationship between price premium and rating level and the last one validates the significance of rating for various purchasing price levels. All the data about buyer's preferences are obtained from a controlled experiment, which involved different groups of buyers that were asked to sort sellers according to their preferences. Analysis for evaluation of research questions is based on statistical and econometrical analysis using generalised linear model with Logit link function and relevant correlation analysis. According to preliminary results sellers with better values of reputation were rewarded with a purchase price for 4 % higher than market average. Analysis and results could show significant benefits of the reputation mechanisms implementation in B2B and e-procurement markets for all participants of these markets.
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