Abstract
Reputation has often been proposed as the central mechanism that creates trust in the sharing economy. However, some sharing platforms that focus primarily on social rather than economically driven exchanges have managed to facilitate exchanges between users without the use of a reputation system. This could indicate that socially driven exchanges are in less need of reputation systems and that having sufficient trust is less problematic. We examine the effect of seller reputation on sales and price as proxies for trust, using a large dataset from a Dutch meal-sharing platform. This platform aims to stimulate social interactions between people via meal sharing. Multilevel regression analyses were used to test the association of reputation with trust. Our main empirical results are that reputation affects both sales and price positively, consistent with the existing reputation literature. We also found evidence of the presence of an information effect, i.e., the influence of reputation on sharing decreases when additional profile information is provided (e.g., a profile photo, a product description). Our results thus confirm the effectiveness of reputation in more socially driven exchanges also. Consequently, platform owners are advised to use reputation on their platform to increase sharing between its users.
Highlights
Reputation is often heralded as the reason why strangers trust each other via the internet [1] because it fosters trust between individuals by informing potential buyers about a seller’s past behaviour and gives a buyer the possibility to sanction a seller if the latter engages in opportunistic behaviour [2,3]
The specific objective of this study is to investigate the role of the effect of reputation on trust in a socially driven exchange setting in the sharing economy
The findings provide support for the premise that trust building in socially driven exchanges in the sharing economy cannot be differentiated per se from that in economically driven exchanges
Summary
Reputation is often heralded as the reason why strangers trust each other via the internet [1] because it fosters trust between individuals by informing potential buyers about a seller’s past behaviour and gives a buyer the possibility to sanction a seller if the latter engages in opportunistic behaviour [2,3]. With the rise of the sharing economy, exchanges have become more socially driven, thereby providing reasons why trust is developed through social mechanisms entailing a possible decreasing effect of reputation on trust. The rise of sharing platforms, such as Uber, Airbnb, and TaskRabbit, have changed consumption from a practice of ownership-based consumption into a blend of ownership and sharing [4] This type of consumption has been termed the sharing economy, a socio-economic system in which products and services are exchanged between individuals via internet-based applications [5]. An example is the free accommodation platform Couchsurfing, which aims to provide social interaction and cultural exchange between travellers. The title of Martin’s article ‘The sharing economy: A pathway to sustainability or a nightmarish form of neoliberal capitalism?’ illustrates the ambiguous attitude towards the sharing economy [17]
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