Reciprocity and Unveiling in Two-Sided Reputation Systems: Evidence from an Experiment on Airbnb

Abstract

Reputation systems are used by nearly every digital marketplace, but designs vary and the effects of these designs are not well understood. We use a large-scale experiment on Airbnb to study the causal effects of one particular design choice—the timing with which feedback by one user about another is revealed on the platform. Feedback was hidden until both parties submitted a review in the treatment group and was revealed immediately after submission in the control group. The treatment stimulated more reviewing in total. This is due to users’ curiosity about what their counterparty wrote and/or the desire to have feedback visible to other users. We also show that the treatment reduced retaliation and reciprocation in feedback and led to lower ratings as a result. The effects of the policy on feedback did not translate into reduced adverse selection on the platform.