Understanding Disputes In Online Auctions

While much attention has been given to reputation mechanisms to deter fraudulent behavior 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 six different types of products that were sold on eBay. In the descriptive and multinomial analysis, we find eight different types of disputes including poor quality, slow shipping, seller withdrawal, failure to ship the product, fraud, poor communications, misunderstanding, and non-paying bidders. Of these the most common types of disputes were poor communications, non-paying bidders and item quality. In the most serious disputes of fraud and no shipment where the seller is at fault the reputation ratings are much lower than the ratings for other disputes related to sellers. Similarly for buyers, the reputation ratings for the most serious disputes of non-paying bidders are considerably lower than those of other types of disputes related to buyers. This implies that analysis of reputation ratings is of some value in reducing the probability of dispute. Of the types of payments methods in eBay auctions personal checks show the greatest number of disputes. Auction sites may wish to discourage sellers from accepting this type of payment.