Evaluation of eBay feedback system

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Evaluation of eBay feedback system

• By Cindy Lee November 30, 2004

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Overview

• What is a feedback system?
• Significance Why do we need a feedback system?
• Is feedback system working?
• If not, what are the alternatives?
• Conclusion

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Research Questions

• What is a feedback system The definition
• How to evaluate effectiveness definition of
  effectiveness
• Is feedback system effective and can it be used
  to prevent internet frauds?
• What are the alternatives to the feedback system
  and/or whether a current feedback system can be
  further improved (if possible)?

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R1 What is it?

• Amazon customer review
• CNET product review
• EBay Feedback System

Product
Person / Seller
Feedback mechanism evaluates the reputation of
the sellers based on the number and success rate
of previous transactions.
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eBay feedback
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Significance

• Why do we need feedback system?
• Trusting Issues Sense of Security
• feedback can reduce customers perception of
  risk and lead them to trust the seller.
• - Peter Kollock

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R2 define effectiveness?

• How to evaluate effectiveness?
• Literature review
• Evaluating based on
• Helping buyer to make a good judgment finding
  the right seller avoiding Internet frauds
• feedback system adoption rate

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R3is feedback effective?

• The Ideal Model
• In Reality
• Too critical, Too nice?
• A high value purchase is a feedback rating
  sufficient?
• Does everyone pay attention to the feedback
  rating?
• Internet fraud calculating feedback scores based
  on of sales, not the price sold.

If sellers believe poor behavior will elicit
negative feedback, and that buyers depend
strongly on reputations, then sellers will
behave well and bad sellers will be deterred
- Paul Resnick and Zack Zeckhauser

18 out of 87 cases (20 percent) where a buyer
left a negative feedback about a seller, the
seller responded with a negative for the
buyer - Resnick and Zechauser

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R3is feedback effective?

• But still, we need feedback System
• Not a perfect system, but eCommerce needs it
• Most people read/care about negative feedbacks

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R4 Alternative Solutions

• Stub Hub Ticket sale site
• Unlike eBay, StubHub
• does not identify sellers from whom buyers are
  purchasing tickets
• there is no feedback system
• Stub Hub guarantees every ticket transaction on
  its site.

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R4 Alternative Solutions

• Why/how does Stub Hub work?
• Secure shipping method
• Buyers have to pay extra for expedited shipping,
  tracking service, and ten percent final value of
  the goods per transaction
• Sellers pay for the lost ticket

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Conclusion

• Literature Review
• Existing feedback system appear to be ineffective
• But feedback is critical. Yet alternative
  solution (Stub Hub) doesnt look better, either
• Personal Experience
• Need a weighted scaled rating

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Q A

• Thank you