Feedback rebates generated unbiased reviews and increased sales by 30%
“Our main findings are first, that RFF (rebate for review) feature is chosen by higher quality sellers, implying that it can serve as a signal of quality. Second, sales of an item are about 30% higher when the seller chooses the rebate option, suggesting that buyers understand the signaling effect of the RFF feature and act on it. Third, RFF induces buyers to write more detailed feedback but does not bias the feedback toward positive feedback.”
By Lingfang (Ivy) Li, Steven Tadelis and Xiaolan Zhou Buying Reputation as a Signal of Quality: Evidence from an Online Marketplace
