Reputation and dispute in eBay transactions

This study presents a conceptual framework for determining what factors affect the likelihood of disputes in e-commerce. It hypothesizes that disputes decrease as seller and buyer reputation and experience increase, and further that the likelihood of disputes is contingent on product price, payment method, and amount of information about the product. The empirical model is tested using five goods and services. The results indicate that reputation mechanisms deter the undesirable behavior that can lead to disputes, that experienced users are less likely to be involved in disputes than inexperienced ones, that consumer-to-consumer transactions are more likely to result in disputes than transactions between businesses, and that transactions in services are more likely to result in disputes than those in goods. The implications for auction sites include the possibility for tracking disputes and improving reputation mechanisms by incorporating information about product types, payment methods, and prices.