The Value of Online Seller Reputation: Evidence from a Price Comparison Site

This paper examines the value of seller reputation for e‐retailers trading via a price comparison site (PCS). E‐markets are widely held to accommodate sellers of differing service quality, including some who behave opportunistically. The paper uses a sample of offers on up to 295 digital cameras traded on a leading PCS, over a 134‐day period to estimate reputation's price impact. User‐generated reputation measures have a significant impact in the expected direction. However, their magnitude is small compared with variables capturing economy‐wide reputation. The strength of the reputation signal increased non‐monotonically with the number of reviews on which it was based. Copyright © 2015 John Wiley & Sons, Ltd.