Reference‐price shifts and customer antagonism: Evidence from reviews for online auctions

This paper investigates how bidders in an auction become antagonized over their successful bid. Using data from a large-scale sales campaign on eBay shows that buyers use the platform's feedback system to punish seller when they discover same item is later offered for lower fixed price. Specifically, it finds (i) probability of receiving unfavorable four times larger than sold by price and (ii) this increasing price, even though reviewing shape themselves. Exploiting temporal variation salient fixed-price offer was using text analysis tools buyer comments these effects are best explained ex post reference-price shifts. An additional survey experiment with exogenous reference prices provides further evidence channel.