Trust that suppliers and buyers will keep their word is a necessary ingredient to a wellfunctioning marketplace. Nowhere is the issue trickier than for electronic markets, wheretransactions tend to be geographically diffuse and anonymous, putting them out of the reach ofthe legal safeguards and...

The amount of institutional intervention necessary to secure efficiency-enhancing cooperation in markets and organizations, in circumstances where interactions take place among essentially strangers, depends critically on the amount of information informal reputation mechanisms need transmit....

The amount of institutional intervention necessary to secure efficiency-enhancing cooperation in markets and organizations, in circumstances where interactions take place among essentially strangers, depends critically on the amount of information informal reputation mechanisms need transmit....

Applying an evolutionary framework, we investigate how a reputation mechanism and abuyer insurance (as used on Internet market platforms such as eBay) interact to promote trustworthinessand trust. Our analysis suggests that the costs involved in giving reliable feedbackdetermine the gains from...