In economic approaches it is often argued that reputation considerations influence the behavior of individuals or firms and that reputation influences the outcome of markets. Empirical evidence is rare though. In this contribution we argue that a positive reputation of sellers should have an...

Summary It is often argued in economics that building a reputation for trustworthiness could help individuals or firms to mitigate or even overcome problems of contractual incompleteness. In this paper, we use data from the German eBay website to test whether a seller’s bad reputation has an...