The Value of Online Reputation: A Behavior Experiment Study

Online reputation has been proved to build trust and decrease uncertainty by prior studies with survey, panel, and experiment data. Aiming to directly measure reputation value, we adopted famous Becker-DeGroot-Marschack (BDM) auction procedure in economics to elicit subject's true willingness to pay (WTP) for product in a three-stage behavior experiment. The image of five-crown and five-heart, neither rating nor reviews, was extracted from Taobao.com to symbolize seller reputation. Data were analyzed in both behavioral and cognitive level. Bidding price and response time provided strong behavioral support to the relationship between seller symbol and reputation value. Data further indicated cognitive perception on seller symbol, which was measured by a psychometric scale of perceived reputation, impacted individual's WTP. Both behavior and cognitive results extended our understanding of reputation value.