This paper examines the impact of seller and bidder reputations on auction prices in eBay's online market. Using a theoretical model that incorporates observable and heterogeneous reputations for default, the authors analyze data from eBay auctions of Intel Pentium III 500 MHz processors conducted in the fall of 1999. The main empirical finding is that seller reputation significantly affects auction prices, while bidder reputation does not. Specifically, bidders pay a statistically and economically significant premium to sellers with better reputations, supporting the theoretical prediction that honest sellers can benefit from positive feedback. The study also discusses the implications for reputation building and future performance prediction in auctions.This paper examines the impact of seller and bidder reputations on auction prices in eBay's online market. Using a theoretical model that incorporates observable and heterogeneous reputations for default, the authors analyze data from eBay auctions of Intel Pentium III 500 MHz processors conducted in the fall of 1999. The main empirical finding is that seller reputation significantly affects auction prices, while bidder reputation does not. Specifically, bidders pay a statistically and economically significant premium to sellers with better reputations, supporting the theoretical prediction that honest sellers can benefit from positive feedback. The study also discusses the implications for reputation building and future performance prediction in auctions.