To understand sellers’ reputation status more intuitively and quickly, a hierarchical reputation system is routinely deployed by online C2C marketplaces, where reputation scores are divided into several grades shown in badges. It not only helps the consumers but also unintentionally introduces the incentive hierarchies to motivate sellers to pursuit the reputation goals. Yet the existing literature remains largely unclear whether sellers’ goal pursuit behavior exists in the context of electronic commerce. We gathered data from a large online marketplace to answer this question. The results show that sellers will exert more efforts (i.e., take discounts) when their absolute reputation scores are closer to the threshold of next grade. Moreover, low value products and high value products decrease more than median value products. This relationship is moderated by sellers’ relative position in their current grade. Our findings contribute both goal pursuit and online market literature and have direct managerial implications.
Wang, Mohan; Fang, Bin; Li, Huiying; and Ye, Qiang, "Goal Pursuit of Sellers in Hierarchical Online Reputation Systems" (2018). PACIS 2018 Proceedings. 256.