eBay as the “Terminator”: Determining User Suspension From Feedback Ratings

Good reputations are won and lost by individuals and companies in various forms on the Internet. eBay has the earliest and most well-known formal ecommerce reputation system and “terminates” members who do not play by the rules. We examine a dataset of 102,035 Not-A-Registered-User (NARU) eBay account feedback ratings from eight different countries. Careful investigation of feedback density over time reveals that threshold values for termination can be detected from feedback history. Several modeling approaches are studied and the Local Polynomial Regression Model (LPRM) is chosen for analysis because it is data driven and no prespecified parametric functional form is assumed. Analyzing US data, we find that large-volume sellers have a higher overall negative feedback compared to those of medium volume sellers. We use the second derivative of the LPRM to explicitly determine the threshold points, that is, the point where a seller's negative feedback increases significantly. These thresholds vary from as much as 18.5 weeks prior to termination (for Medium sellers), to as little as 8.5 weeks (for Large sellers). We find similar results in the other countries. These threshold points provide valuable information for buyers when choosing a seller. Our analysis suggests that eBay's termination policy appears to be correlated to fee revenue.     

The Big Five and venture survival: Is there a linkage?

This study examines the relationship of the entrepreneur's personality to long-term venture survival. We measure survival in two ways: (1) the likelihood the venture will survive for at least 8 years and (2) the overall life span of the venture. The “Big Five” personality attributes—extraversion, emotional stability, agreeableness, conscientiousness, and openness to experience provide the measures of the entrepreneur's personality. As hypothesized, the entrepreneur's conscientiousness was positively related to long-term venture survival. Contrary to expectations, we found a negative relationship between the entrepreneur's openness and long-term venture survival. Extraversion, emotional stability, and agreeableness were unrelated to long-term venture survival.     

An Updated Look at the Factors Contributing to the Final Selling Price of Auctioned Gift Cards

Much has changed in 10 years, and this study follows up on one previously published that employed linear regression on Home Depot gift cards sold on eBay, which utilized the standard auction format as a proxy for a homogeneous good. The previous study looked at data beginning in 2006 and found results indicating that a number of variables associated with the card influenced the percentage of total value obtained for the card. Gift cards are used much more widely today than previously, and eBay has many more fixed price listings than auctions. It is now much more difficult to see variables related to buyers, leave negative feedback, and accept anything but electronic payment. This article looks at a number of the variables examined in the first study and updates the findings using a dataset of Home Depot cards auctioned over a 2-month time period in 2016.     

An exploratory investigation of problematic online auction behaviors: Experiences of eBay users

eBay hosts more than 12.5 million auctions per day in more than 1000 categories across 28 global markets and attracts more than 43 million unique visitors per month. This paper explores online auction users problematic behaviors that could potentially lead to an addiction. Specifically, we examine the following research questions: what consumer behaviors could be construed as problematic and potentially addictive; do these behaviors generally reflect the core components of addiction; and what are the implications for online auction retailers, managers, and society? Using qualitative methods, the authors identify four key themes that capture problematic behaviors that could lead to online auction addiction. These themes include psychological distress; habitual usage; negative consequences; and dependence, withdrawal and self-regulation.     

Online Auction Fraud: Ethical Perspective

Internet fraud is an issue that increasingly concerns regulators, consumers, firms, and business ethics researchers. In this article, we examine one common form of internet fraud, the practice of shill bidding (when a seller in an auction enters a bid on his or her own item). The significant incidence of shill bidding on eBay (in spite of the fact that it is illegal just as it is in live auctions) exemplifies the current ineffectiveness of regulatory means as well as the lack of effective societal mechanisms to prevent online fraud. Further, the proliferation of shill bidding along with other types of internet fraud may have broader implications. If unethical behavior such as shill bidding becomes too widespread on the internet, regulators and other societal forces may deem it necessary to institute controls that will impact the entire online marketplace as well as the future development and regulation of business activities on the internet. Our results indicate that shill bidding is perpetrated on eBay significantly more often than 0.1% rate of fraud estimated by the firm. This suggests that regulators, users, and others stakeholders may become concerned enough to act. The impact of those responses on the internet of the future may affect a broad array of users beyond the unethical sellers on eBay. Alex Nikitkov is an Assistant Professor of Accounting at Brock University in St. Catharines, Ontario, Canada Darlene Bay is an Assistant Professor of Accounting at Brock University in St. Catharines, Ontario, Canada     

Does negative feedback impact new ventures' organizational identity? The role of founding teams' human capital and feedback source

Although a strong organizational identity (OI) is important for venture success, the impact of negative feedback on a new venture's OI is poorly understood. Drawing on human capital theory we argue that founding teams with more founding and industry experience can more effectively defend OI after negative feedback. Using literature on intra-group bias we further theorize that these benefits of founding and industry experience are more pronounced when feedback emerges from sources external rather than internal to the venture. A multi-period research design and data on 1528 survey responses from 598 members of 81 ventures support our model.     

Consumer motivations and concerns in online auctions: an exploratory study

This investigates the reasons behind the dramatic growth of Internet auction companies such as eBay, exploring into why so many consumers have been motivated to turn to online auctions to purchase and sell goods. It is found that the ability to purchase items at lower prices than from retail stores is the primary motivation, along with having access to previously unobtainable items. Concerns mainly relate to potential fraudulent transactions, although the negative feedback system is found to be vital in the reduction of fears over fraud. Interaction with other auction users is found to be important for practical reasons such as information seeking, rather than for enjoyment. The main conclusion is that the benefits of using Internet auctions far outweigh the risks involved.     

Efficiency Considerations in Online Auction Markets

The main contention of this article is that online auction markets are amenable to efficiency considerations akin to traditional financial markets. While the underlying assets traded are dissimilar between the financial and online auction markets, the fundamental principles that drive these markets are consanguineous in that similar efficiency notions are applicable. Based on the principles of arbitrage, we develop a set of efficiency criteria to evaluate the auction activity of new and identically described items. Two arbitrage principles, seller arbitrage and buyer arbitrage, are developed. These principles can be employed to evaluate the price behavior of temporally proximate auctions and to generate a useful benchmark to make efficiency evaluations. We find evidence of inefficiency for each of the items we empirically tested based on the data from eBay, currently the largest online auction house.     

Passion for entrepreneurship or passion for the product? A conjoint analysis of angel and VC decision-making

Passion is important to venture investors, but what specifically do they want entrepreneurs to be passionate about? This study theorizes that angel investors and venture capitalists consider both entrepreneurs' passion for activities related to the product or service the venture provides (i.e., product passion) and passion for founding and developing new ventures (i.e., entrepreneurial passion). We demonstrate that both types of passion become more appealing when the investor perceives that the entrepreneur is highly open and receptive to feedback, suggesting that openness to feedback mitigates potential concerns associated with passion in its extremes. We further find that venture investors differ in their consideration of passion; angel investors and venture capitalists with more investing experience place greater emphasis on the combination of product passion and openness to feedback, whereas those with more entrepreneurial experience emphasize the combination of entrepreneurial passion and openness to feedback.     

Reconsidering the venture capitalists' “value added” proposition: An interorganizational learning perspective

This study examines the interorganizational relationships among venture capitalists (VCs) and new venture teams (NVTs) for their contribution to long-term improvement in the performance of a venture. Research in (1) learning assistance, (2) NVT dismissal and (3) procedural justice provide important insights into the unique interorganizational relationship that exists among VCs and the NVTs they fund. We found the following: (1) no statistically significant support for strategic information, (2) a negative association for dismissals and (3) positive support for procedurally just interventions. These longitudinal findings suggest important future research on interorganizational relationships.     

Early-stage business model experimentation and pivoting

Recent literature suggests entrepreneurs struggle to pivot—or fundamentally change aspects of their venture—due to identity-based resistance to change. Yet, when entrepreneurs receive negative feedback, overcoming this resistance may be important to pivoting their business model. We adopt a convergent, mixed methods research design to explore when and why some entrepreneurs overcome resistance to change in response to negative feedback during early-stage business model experimentation. Building upon qualitative data that we gathered and analyzed, we theorize entrepreneurs may resist pivoting their value proposition relative to other business model components despite receiving negative feedback on this aspect of their business model. However, we find three factors – entrepreneurial experience, startup mentoring, and team size – may enable entrepreneurs to pivot in response to negative feedback. We theorize that these factors broaden a startup team's perspective, enabling value proposition pivoting during early-stage business model experimentation. We test these relationships with quantitative data from 80 startups engaged in business model experimentation and find support across hypotheses. We contribute to understanding when and why entrepreneurs pivot aspects of their business models in response to negative feedback during early-stage business model experimentation.Executive summaryThe entrepreneurship literature suggests startups may benefit from experimentation and pivoting different parts of their business model in response to negative feedback from stakeholders (Andries et al., 2021; Camuffo et al., 2020; Shepherd and Gruber, 2021). In early stages of starting a new venture, a business model refers to a cognitive schema or belief about an activity system that could potentially create and capture value (Massa et al., 2017; Shepherd and Gruber, 2021). Business model experimentation is the process of testing assumptions underlying this potential business model and pivoting business model assumptions in response to negative feedback (Andries et al., 2013; McDonald and Eisenhardt, 2020; Leatherbee and Katila, 2020). Building upon prior literature, we define business model pivoting as a fundamental change to parts of the business model (Berends et al., 2021; Snihur and Clarysse, 2022; Shepherd and Gruber, 2021). Yet, literature also suggests founders often struggle to pivot assumptions despite negative feedback. Motives to preserve and protect certain assumptions relevant to founders' identities can interfere with pivoting (Grimes, 2018; Kirtley and O'Mahony, 2023; Zuzul and Tripsas, 2020). Despite the general understanding that founders struggle to change their ideas, however, the entrepreneurship literature currently lacks precise insight into when and why founders can overcome resistance to pivoting.In this research, we explore when and why startups pivot different parts of their business model. We do so within the context of early-stage business model experimentation, where founders explicitly state assumptions about different parts of their potential business model, test those assumptions against stakeholder feedback, and are encouraged to pivot business model components in response to negative feedback. Through a mixed methods research design, we find (1) founders tend to resist pivoting their value propositions relative to other parts of a business model in response to negative feedback; and (2) entrepreneurial experience, startup mentoring, and team size enables startups to overcome this resistance to pivoting in response to negative feedback. We theorize these factors broaden founders' perspectives (Warshay, 1962), contributing to a greater willingness to pivot during experimentation.We contribute to the literature on entrepreneurial pivoting by explaining nuanced variation in pivoting distinct business model components during experimentation. This contribution is important because it reveals that resistance to pivoting the business model may be more complex than previously thought. We also contribute to the literature at the nexus of business model experimentation and entrepreneurial cognition by finding that entrepreneurial experience, startup mentoring, and team size enable startups to pivot despite psychological resistance to pivoting in response to negative feedback because it broadens founders' perspectives. This insight is important theoretically because it advances what we know about enabling experimenting with business models under conditions of uncertainty. The research presented here has clear and important implications for practice. This research suggests founders often resist changing the value proposition versus other components of their business models in early stages of venture development. This resistance can impede experimentation and pivoting in response to negative feedback. To the extent founders want to broaden their perspective to enable pivoting their value propositions in response to negative feedback during early stages of venture development, our data suggest they may be able to do so by recruiting members with entrepreneurial experience on their team (or gain entrepreneurial experience themselves), engage frequently with startup mentors, and increase the size of their team. Overall, we view the breath of perspective that comes from experience and interactions with others as an advantage for entrepreneurs when experimenting with their business models during early stages of venture development.     

The Role of Service Operations Management in New Retail Venture Survival

While the factors related to the survival of established retail firms are well researched, current understanding of drivers of new retail venture survival is limited. We assess the influence of retail operations characteristics on the survival of new retail ventures. Based on data from 15,901 Portuguese retail ventures that were founded between 2006 and 2010 and followed until 2014, the new retail ventures with faster inventory turnover or higher staff expenses per employee had a higher likelihood of survival while higher investment in intangible assets had a negative but negligible effect on survival. The implications of these findings for entrepreneurs of new retailing ventures are discussed.     

淘宝胜出eBay易趣之谜

在中国 C2C 市场上,易趣成立最早,1999—2002年间取得了飞速发展,然而2003年淘宝成立后,逐步鲸吞蚕食了易趣的市场份额;2006年淘宝的市场份额达到了70%。本文拟针对这一现象,从淘宝在艰难的环境中生存之术,到相持阶段的以攻为守,到后来发动大反攻这样一个阶段为线索,分析淘宝如何在竞争中开始极其弱势而后来居上的原因。     

Are success and survival factors the same for social and business ventures?

Despite the growing interest in social entrepreneurship, there exist gaps in research that compares traditional business-oriented entrepreneurship with the social kind. This study attempts to fill the gap by answering the following questions: Are there significant differences between the survival chances of business and social ventures? and Do the traits of the entrepreneur and the firm play the same role as success factors for both types of venture? Hypotheses are tested using data collected from 2,179 firms. The results show that significant differences exist between social and business-oriented entrepreneurship in the form and intensity of the independent variables related to survival.     

The exemplar enigma: New venture image formation in an emergent organizational category

We examine the process of organizational image formation for new ventures entering an emerging organizational category. An emerging organizational category is usually initiated by a pioneering venture that adopts a new organizational form. If that venture garners early recognition, it serves as an exemplar, attracting other ventures to enter the emerging category. Those ventures then have to formulate an image that both accounts for and competes with that of the category exemplar. This article describes how ventures form their images in the face of this tension. We examine this tension using qualitative data from eight new U.S. venture accelerators entering the emergent venture accelerator category, which revealed that image formation in an emerging organizational category involves three basic considerations: (1) emulation, (2) experimentation, and (3) divergence. Through emulation, organizations observe and rely on the exemplar in order to capture legitimacy. Through experimentation, organizations consider who they are beyond the exemplar and how they might change. Through divergence, organizations definitively claim and establish a unique image. From this, a conceptual framework is proposed in which organizational and contextual factors influence image formation actions and decisions.     

HomeGrocer.com: Anatomy of a failure

This case study examines the initiation, financing, development, and failed merger of an ambitious online grocery retail venture: HomeGrocer.com. It highlights the risks and challenges associated with developing a revolutionary venture. Even though the HomeGrocer.com team did many things right developmentally, some key errors and unfortunate timing resulted in them expanding too quickly and running low on cash. It also forced them to make a tough strategic decision about whether to scale back operations and renege on their IPO commitments or merge with a well-funded competitor, Webvan. The case discusses lessons that can be learned from business failure.     

Online Shoppers' Perceptions and Use of Comparison-Shopping Sites: An Exploratory Study

Comparison-shopping sites currently offer online shoppers various combinations of free services such as price comparisons, merchant ratings, links to e-tailers’ websites, and/or customer reviews in the search results page(s). The utility and market values of shopping comparison sites have attracted Internet giants such as eBay, Google, and Yahoo to the extent of developing or acquiring such sites. Scholarly research on comparison-shopping sites has focused on (1) trust in online recommendation agents, and (2) methods used by electronic agents to produce the recommendations. Our study explored how online shoppers’ attitudes toward comparison-shopping sites impact perceived credibility and usefulness of these sites. We also examined online shoppers’ merchant selection criteria and their likelihood to continue using comparison-shopping sites. One interesting finding from our study was that merchants need to be strong on site ratings and brand awareness to appeal to a wide online market. The finding dispelled the notion that e-tailers presented by shopping comparison sites need to compete, basically, only on price.     

My username is IN! The influence of inward vs. outward wandering usernames on judgments of online seller trustworthiness

Previous research showed that words for which the consonant articulation spots wander from the front of the mouth to the back (e.g., EPOK; inward) are preferred over words with the reversed sequence (e.g., EKOP; outward). In the present research, we extended this effect to judgments of online seller trustworthiness and choice of transaction partners. In seven experiments in the context of the online auction market eBay, we show that the mere use of inward compared to outward usernames increases the level of trustworthiness ascribed to online sellers (Experiments 1A, 1B, 2, 4A, 4B) and the likelihood that a seller is chosen for the economic transaction (Experiment 5). As a boundary condition, this effect is reduced when diagnostic information about the seller's reputation is introduced (Experiment 3). We discuss these results in terms of their practical implications for marketing strategies of online sellers and in terms of their relation to research on interpersonal trust.     

“To Be or Not to Be an Auctioneer?” Some Thoughts on the Legal Nature of Online “eBay” Auctions and the Protection of Consumers

This paper discusses the legal classification of online “eBay” auctions. The discussion has key implications on the scope of consumer protection law as sale by auctions are, for example, excluded from the scope of the Consumer Protection (Distance Selling) Regulations 2000. The paper uncovers that online “eBay” auctions cannot always be considered as traditional auctions and that eBay, as an intermediary, is not to be considered as an auctioneer. This creates difficulties associated with a distributive application of consumer protection laws such as the Consumer Protection (Distance Selling) Regulations 2000. Another set of difficulties is associated with a lenient legal regime applicable to the liability of eBay under the Electronic Commerce (EC Directive) Regulations 2002. The paper concludes that there is an urgent need to clarify the legal classification of online auctions and to rethink the liability of online auction sites to better protect consumers.

The critical relationship between venture capitalists and entrepreneurs: Planning,decision-making,and control

On the basis of preliminary interview and survey data, evidence suggests that venture capitalists (VCs) are less involved with their affiliated new venture organizations than may be necessary for long term survival. The dual core model of innovation that emphasizes the need of a technical and administrative core for continued innovation is used as the foundation of this perspective. In the post investment relationship between the venture capitalist and the new venture, it is expected that the new venture has a well developed technical core. However, the administrative needs are often ignored by the new venture entrepreneurs. Therefore, it is recommended that VCs become more involved in the administrative component of the new venture organization (NVO) through either direct involvement or through the recruiting of key personnel. As the NVO moves through its life cycle the addition of an administrative component to its technical core provides for continued innovation necessary for long term survival and growth.