The Impact Of Rating Systems On Subcontracting Decisions - A Transaction Cost Analysis
- Topics:
- Outsourced Services
- Source:
- Stanford University
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Overview: This paper investigates how different types of rating mechanisms can affect transaction costs in business-to-business electronic commerce. In consumer electronic marketplaces, where the asset-specificity of the transactions is generally low, simple unweighted rating mechanisms have been shown to increase trust and therefore also decrease the transactions costs associated with opportunistic behavior. However, it was argued that if a reputation mechanism is to decrease the transaction costs for highly asset specific transactions, it is necessary that the rating mechanism account for the relationship between the user and the rater. To empirically validate this hypothesis, a prototype credibility-weighted rating tool is created that incorporates a methodology to calculate a weighted rating based on source credibility theory.
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Format: PDF | Size: 499KB | Date: Feb 2003 | Pages: 35
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