Skip to main content
  • Research Article
  • Published:

Reputation in China’s online auction market: Evidence from


Using data on prepaid cards for an online game listed on, this paper examines the impact of sellers’ reputation on their sales in China’s online market. It is found that sellers’ good reputation has a positive impact on their sales volume, but the marginal effect of this impact decreases severely. We also find that sellers’ affiliation with seller coalitions can increase their sales in a given period. Results show that individual and collective reputation can function well in the absence of mature law and social credit system related to online trade, and that private order can substitute public order in a market with immature laws as in China.


借助淘宝网上的在线游戏预付卡等数据, 研究中国网上销售中卖方信誉的作用, 发现卖方的声誉对其销售量有正面的影响, 但这种影响是非线性的。 属于商盟的卖家在给定时间内的销售量高于不属于任何商盟的卖家, 从而验证了在有关法律不健全和社会信用不完善的前提下, 网上交易中卖家个人声誉和卖家所属商盟集体声誉在销售中的作用。


  • Amemiya T(1984). Tobit models: A survey. Journal of Econometrics, 24: 3–16

    Google Scholar 

  • Baron D P(2002). Private ordering on the Internet: The eBay community of traders. Business and Politics, (4): 245–274

  • Dellarocas C(2003). The digitization of word of mouth: Promise and challenges of online feedback mechanisms. Management Science, 49: 1407–1424

    Google Scholar 

  • Ellison G(1994). Cooperation in the prisoner’s dilemma with anonymous random matching. Review of Economic Studies, 61: 567–588

    Google Scholar 

  • Greif A(2004). Institutions and impersonal exchange: The European experience. Stanford Law and Economics Olin Working Paper. No. 284

  • Houser D, Wooders J(2005). Reputation in auctions: Theory, and evidence from eBay. Working Paper

  • Kandori M(1992). Social norms and community enforcement. Review of Economic Studies, 59: 63–80

    Google Scholar 

  • Klein B, Leffler K(1981). The role of market forces in assuring contractual performance. Journal of Political Economy, 89: 615–641

    Article  Google Scholar 

  • Lucking-Reiley D(2000). Auction on the Internet: What’s being auctioned, and how? Journal of Industrial Economics, 48: 227–253

    Google Scholar 

  • Lucking-Reiley D, Bryan D, Prasad N, Reeves, D(2000). Pennies from eBay: The determinants of price in online auctions. Working Paper. Vanderbilt University

  • McDonald C G, Slawson V C J(2002). Reputation in an Internet auction market. Economics Inquiry, 40: 633–650

    Article  Google Scholar 

  • Melnik M I, Alm J(2002). Does a seller’s reputation matter? Evidence from eBay auctions. Journal of Industrial Economics, 50: 337–349

    Google Scholar 

  • Okuno-Fujiwara M, Postlewaite A(1995). Social norms and random matching games. Games and Economic Behavior, (9): 79–109

  • Resnick P, Zeckhauser R(2002). Trust among strangers in Internet transactions: Empirical analysis of eBay’s reputation system. In: M.R. Baye(ed), The Economics of the Internet and E-Commerce: Advances in Applied Microeconomics, Vol. 11. Greenwich, CT: JAI Press

    Google Scholar 

  • Shapiro C(1983): Premiums for high quality products as returns to reputation. Quarterly Journal of Economics, 98: 659–680

    Google Scholar 

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Wei’an Li.

Additional information

Translated and revised from Nankai guanli pinglun 南开맜理评论 (Nankai Business Review), 2007, 10(5): 36–46

Rights and permissions

Reprints and permissions

About this article

Cite this article

Li, W., Wu, D. & Xu, H. Reputation in China’s online auction market: Evidence from Front. Bus. Res. China 2, 323–338 (2008).

Download citation

  • Published:

  • Issue Date:

  • DOI: