Causes of Disputes in Online Auctions

While much attention has been given to reputation mechanisms to deter fraudulent behaviour in online auctions, we know little about the nature of disputes or the types of problems that users face. This is an exploratory analysis of 129 disputes for five different types of products that were sold on eBay. In the analysis we find seven different types of disputes including poor quality, slow shipping, seller withdrawal, fraud, poor communications, misunderstanding, and non-paying bidders. Each type of dispute is affected by different factors. This research finds that used products tend to have problems related to misrepresentation and fraud. A buyer with a better reputation is less likely to fail to pay and the likelihood to pay appears to be related to the auction process. Sellers are also more likely to avoid delays in the shipping of products if these have a higher price. Business-related products are more likely to result in less disputes related to slow shipping. Seller withdrawal disputes are related to the ratings of the seller and misunderstanding related disputes are less likely to occur when a more detailed description is provided.