Considering the Prisoner’s Dilemma in this chapter, provide your own insight on how sites such as eBay “work” for most participants of this popular online auction site. Do they really work? Or is there too much risk?
A big part of the prisoners dilemma is having knowledge of what the other person will act on. For example, if a buyer on EBay knows the history of the other bidder and/or seller, then they may act differently than if they didn't know anything about them. Although there is still a big risk of the unknown, sites like Ebay allow users to research each other before they make transactions. In the end, it comes down to trust. If you research a buyer or seller and can honestly trust them enough to make an online transaction, most people would do it.
An interesting tool which I think people use to make themselves look more trustful are returns. If someone is looking at something on an online site and is unsure about it, they are much more likely to purchase that item if the item can be returned. The return policy ensures trust among sellers and buyers.
Online auction sites always do have slight risk but I think as they become more popular, people are becoming more and more trustworthy of the sites themselves and the people on them.
I have read (but don't have the quote handy) that eBay is suffering now from a lack of growth. You touch upon the real point here: how do we know to trust? Do we trust eBay? The seller?
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