Consumer Information Feedback Analysis In Online Reputation Systems

Technology progress makes internet market become even more important in our lives. The slowly development of retail market in China make the online market more room to grow. But the commercial online has even more serious information asymmetric problem that lead to such adverse selection or moral hazard phenomenon which give net-consumers many difficulties. Online reputation system is using the Internet’s bi-directional communication capabilities in order to artificially engineer large-scale word-of mouth networks where individuals share opinions and experiences. The system deter moral hazard by acting as sanctioning devices and alleviate adverse selection issues by acting as signaling devices, thus make the online market more efficiency. But the nature of public goods makes the supply of information often unable to meet the demand of online reputation system. Looking for effective motivations which can incentive information feedback and then using them to improve the online reputation system to maximize the effective information supply is the main purpose of this paper. Be different from previous studies which always focus on the relation between the online reputation system and the sale price/sale probabilities, this paper will select the more informative evaluate reviews as the object of study. The new behavior economics theory provides new theoretical foundation for our research. Taobao and Tmall’s active deal flow and huge information review system gives our empirical analysis sufficient data support. Based on Taobao and Tmall’s existing online reputation system rules, after collecting and sorting review data and use regression analysis I finally find out that5main motives which incent people give information feedbacks. They are:expression of positive emotions, venting of negative feelings, make shops realize their problems, concern for other consumers and hope that the platform operator will serve as a moderator. And the commodity information transparency together with online market platforms’standards can replace online reputation systems in some degrees which can solve the feedback information’s insufficient supply problem in another way. Finally, according to the regression results this article make some recommendations for both platform operator and government, and also give some future research advise in this area.