Business Commons^™

Reputation Stretching In Online Auctions, Jianqing Chen, Mei Lin, Andrew B. Whinston

Research Collection School Of Computing and Information Systems

Reputation systems are ubiquitously employed in the online marketplaces to provide information on users’ abilities and trustworthiness. We focus particularly on the problem of reputation stretching, the extension of an established reputation into a new market. By examining various factors—market size, the expected performance in the expanding market, and the risk of performance in the expanding market—we characterize conditions that affect bidder’s stretching decision in the expanding market. Moreover, we analyze both the short-term and the long-term expanding cases, and obtain contrasting results in the two settings.