Online auctions create reputation mechanisms to give users information about the reputation of their trading partners. This information helps the buyer to make an informed decision regarding his purchase: whether or not to make a purchase from a particular seller and the price the buyer is willing to pay. eBay is a leading internet auctioneers and in May 2008, it changed its feedback system. This paper examines the new feedback system and studies the impact of seller's reputation on auction's price. The empirical results show that buyers respond to the Positive Feedback ratings of sellers. However, the impact on the price is small.
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