Gary Bolton (University of Texas at Dallas), 20 June, 2016, 4:30pm, DUBS 223

Speaker: Gary Bolton, University of Texas at Dallas

Title: Conflict Resolution vs. Conflict Escalation in Online Markets  

Date & Time: 20 June 2016 (Monday), 4:30-5:45 pm

Venue:   Durham University Business School, room 223

Abstract:

Many online markets encourage traders to make good after an unsatisfactory transaction by offering the opportunity to withdraw negative reputational feedback in a conflict resolution phase. Motivated by field evidence and guided by theoretical considerations, we use laboratory markets with two-sided moral hazard to show that this option, contrary to the intended purpose, produces an escalation of conflict in the form of strongly strategically distorted reputation information and less trust and trustworthiness in the trading phase. The detrimental impact is mitigated by buyers who refuse to give feedback strategically, even when it comes at a cost to themselves. It is also mitigated in markets with one-sided moral hazard. 

Last modified: Sat, 11 Jun 2016 16:17:50 BST