Rating Inflation on eBay

While looking for an atomic analog alarm clock (an exceedingly rare item), I came across a few auctions from a couple of sellers. I noticed that both sellers had 100% positive feedback (a surprise because I don't usually use eBay), so I browsed through the text of the feedback. On each seller the vast majority of the feedback included ridiculous superlatives and lots of exclamation marks and plusses. Buried among the comments I found a couple of clearly neutral or negative texts, but each with a positive rating. I asked my wife (who uses eBay) about this, and she mentioned that eBay gives dire warnings if you even try to leave neutral feedback, as if you're doing some great evil to the other party. Some sellers agreements even include a clause that you cannot leave negative or sometimes even neutral feedback! Needless to say she does not buy from said sellers. Fear of revenge feedback is also clearly an issue.

As with so many of the world's problems, "Brad Templeton has an idea for a solution":http://ideas.4brad.com/archives/000018.html as well as some suggestions for how eBay could deal with bid sniping and speculations as to why eBay hasn't bothered to implement any solutions to either of these issues.

I was going to do some research and post an insightful article on why eBay suffers from rating inflation and what sorts of organic solutions have arisen for people to deal with the problem on their own, but what's the blogosphere for if it's not to get other people to do your research and fact checking for you? So, what are people doing to get around the problem of rating inflation?

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I like Brad's double

I like Brad's double feedback idea. Goes like this:

After the auction closes, the seller and buyer have a fixed amount of time to post a rating. During that period, the seller or buyer may post a rating first, but neither rating is publicly revealed until A) both parties have posted, or B) the aforementioned rating period has expired. After that time, rating is closed, and if either party failed to post a rating during the period, they are out of luck.

This would entirely eliminate revenge ratings. Personally, I agree, the rating system right now sucks. It has lost almost all credibility with me, because it is not genuine and unbiased. It's like the Robert Parker Wine Advocate, and Wine Spectator, rating systems. You rate so many things about 90, then people come to expect it, and if anything rates below 90, then it's considered sub-par, even if it's not. Ratings inflation sucks.

Which brings me to another point that I have yet to see discussed. I don't like this "good, bad or neither" cut-and-dried rating system. Never have. I know, you can include comments, but alot of times, people don't look at the comments, especially when you're just seeing the aggregate score. As it is now, you could have 2 different feedbacks: one is for a shipment being a couple days late, the other is for the product being completely wrecked. However, they both count exactly the same when the aggregate total rating for a seller/buyer is calculated. It would help if they instituted a 0-10 point scale.

As for Auction Sniping, all it does, for me, is save me money by keeping the price from being driven up via bid wars. Good for buyers, bad for sellers.

Sniping isn't a problem if

Sniping isn't a problem if you bid your reserve price. If you bid your maximum willingness to pay, you will by definition not be disappointed if you are outbid. Of course, discovering your reserve price can be difficult...
At any rate this paper does a great job of analyzing sniping as a strategy
http://www.stanford.edu/class/cs206/roth-ockenfels.pdf

As for feedback, there's nothing eggregiously wrong with the system, people just think it serves some greater purpose than it actually does. It does not exist to signal whether a buyer or seller is "nice to deal with." It's there to signal the likelihood they'll commit outright fraud. For example, you might think that if I win an auction, the item is lost in the mail, and I get a refund from the insurance, that would be a "neutral" feedback, since I never got to evaluate the item. Wrong! That should be a "positive" because the seller did the right thing.

It's simple really. If the seller misrepresents the item, pulls a bait'n'switch, or just plain defrauds you, that's a negative. If the item is as described, arrived more or less timely... basically if the rules were followed, that's a positive. Very few cases really deserve a neutral, such as if you got the item but the seller was lazy about shipping it and it took 3 weeks.

So the reason you see so few negatives is that... markets work! It's not that transactions that "should have" received negative ratings are being "inflated" to positives, it's that transactions that deserve negative ratings are usually illegal or otherwise actionable. The massive incentives to Do The Right Thing prevent most negative-rated transactions from getting to that stage.

Of course, if you think feedback should be an index of quality rather than safety, then obviously it needs to be overhauled, but I don't think the system needs that. All I really care about when bidding is "is this guy gonna screw me" and the feedback system as it is handles that with aplomb.

This seems like a knowledge

This seems like a knowledge problem, so I'd expect people to seek out others who have had experience with other sellers and buyers and exhange information that way. Voila - Ebay community forums and specifically, the Feedback discussion forum. I have no doubt whatsoever that other services not a part of Ebay host a similar service. Blogs, AOL Instant Messenger, e-mail lists, etc.