Abstract
The social foundations of the platform economy stand at the forefront of academic research in economic sociology, communication, and organization studies. Can a study of patterns of gift-giving in online marketplaces further our understanding of the social ties and normative structures underpinning trade? This study suggests that the answer is in the affirmative. Studies of gift-giving in offline markets assert that gifting is predicated on reciprocity and social obligation, and enables the constitution and reproduction of social ties that facilitate trade. This article presents a three-pronged theoretical argument. First, it extends the argument that gifting creates a social space that is open to manipulations and interpretations. Second, it asserts that gift-giving in the online marketplace should be viewed as a particular type of “market device,” an object that guides market actors how to make sense of their socio-economic actions. Third, the article argues that gifting operates as a “conversion device” providing buyers and sellers with a flexible material and symbolic resource that allows them to oscillate and convert between distinct moral frameworks that co-exist within the socio-cultural institution of gift-giving. Based on 54 in-depth interviews, this study finds that gifting flourishes around reputation systems, pointing to their central role in the platform economy. The role of gift-giving as a conversion device is developed and discussed, and the way sellers employ it to convert the normative framework depicting reputation systems as rational and calculative, into a framework highlighting reciprocity and obligation.
Introduction
The social foundations of the platform economy currently stand at the forefront of academic research in economic sociology (Beunza, 2019; Kirchner & Schubler, 2019), communication (Bucher & Helmond, 2017; Hargittai & Marwick, 2016; Helmond, 2015), the sociology of work (Kate, 2017; Schor et al., 2020; Vallas & Schor, 2020), and organizational and business literature (Luca, 2016; Walia, 2013). Scholars in these diverse fields seek to portray the social ties, patterns of interactions, socio-economic structures, and cultural institutions that frame, facilitate, and support online communication and trade. Gift-giving is widespread in most, if not all, human societies (Mauss, 1925/1954), and markets are no exception. Employing gift-giving as a diagnostic tool, and focusing on online marketplaces, this article seeks to contribute to the study of the social foundations of online trade by asking: Can a study of online gift-giving further our understanding of the social foundations of online marketplaces? Building on the literature on the persistent entwining of gift and commodity exchange in offline markets (Bird-David, 1997; Darr & Pinch, 2013), I suggest that the answer to this question is in the affirmative. Gifts are predicated on reciprocity and social obligation, and a study of patterns of gift-giving in online marketplaces can expose the role of these variables in facilitating online communication and trade (Vandevelde, 2000).
Studies of gifting in offline markets assert that gifting enables the constitution and reproduction of social ties that facilitate and support the ongoing exchange of products and services (Darr, 2006). Building on this literature, a study of gifting in online trade can explore if and how this process operates in online marketplaces. In addition, extensive gifting often appears at critical junctures in the offline sales process, such as the closing of deals in advanced consumer markets (Darr, 2017). Thus, a study of patterns of gifting in online marketplaces can identify critical junctures in the online sales process. Finally, gifting operates on many socio-economic levels, ranging from a simple marketing device to a vehicle for the performance of identity and the expression of emotions such as gratitude and personal sympathy. With the lack of physical, face-to-face encounters between buyers and sellers in offline markets, the expressive and performative role of gift-giving in online marketplaces can fill this void and is expected to be amplified. Gift-giving is presented in the literature on offline markets as a flexible socio-cultural resource, riddled with contradictions, that allows market actors to manipulate their exchange partners, but also to further diverse socio-economic interests. Indeed, studies of offline market gifting argue that reciprocity and obligation create a social space between the giver and the receiver, and that this space is open to interpretation and manipulation (Bourdieu, 2005).
Theoretically, this article presents a three-pronged argument. First, it extends the argument that gifting creates a social space that is open to manipulations and interpretations. Second, it asserts that gift-giving in the online marketplace should be viewed as a particular type of “market device” (Callon et al., 2007), an object that allows the boxing of professional or widely accepted socio-cultural knowledge and know-how, which is employed by market actors to guide and make sense of their socio-economic actions. Third, in the realm of market devices, gift-giving operates as a “conversion device,” a socio-cultural apparatus riddled with contradictions that makes it possible for something to change its function or form. In the context of online marketplaces, gifting operates as a conversion device because it provides buyers and sellers with a flexible material and symbolic resource that allows them to oscillate and convert between distinct moral frameworks that co-exist within the socio-cultural institution of gift-giving. These moral frameworks are based on fundamentally different pillars: one moral framework is strategic, rational, and calculative in nature, while the other is based on social bonds, obligation, reciprocity, and friendship. As a meeting ground of opposing moral frameworks, gifting is infused with ambiguities, paradoxes, and tensions. The ability of gifts to act as conversion devices derives from their inherent ambiguities, which help resolve and make sense of tensions that arise as part of contemporary market exchange (e.g., Korczynski, 2005). Viewing gifting as a conversion device that can mediate between opposing moral frameworks means seeing its ability to redefine and manipulate the nature of the sales encounter and to reframe the interests and motives underpinning a specific transaction. Anecdotal empirical evidence suggests that gift-giving is sometimes employed by salespeople in offline markets to shift from a calculative-rational moral framework to one based on social bonds and obligations (Darr, 2006, p. 44).
The empirical examination of gifting as a conversion device focuses on the elaborate gift economy that develops around reputation systems, mainly that of Etsy, an online marketplace dedicated to the sale of arts and crafts, where buyers rank and rate online shop owners. Reputation systems are embedded in the algorithms of most online marketplaces, and buyers, by performing unpaid “digital labour” (Fine, 2019), assess the quality of goods offered for sale and the trustworthiness of different sellers. Marketplace organizers use different means to encourage, facilitate, and guide buyers’ judgments. While concluding that “. . . stable reputation systems can ameliorate concerns about risk and uncertainty,” Cheshire (2011, p. 52) argues that “online reputation information is not a perfect solution to the problem of trust because it is vulnerable to exploitation, deception and misinterpretation.” Thus, reputation systems that are presented by platform organizers as an objective market device meant to help buyers evaluate sellers’ trustworthiness, as well as the quality of products offered for sale, can potentially be manipulated in a variety of ways. As this article suggests, the use of gifting as a conversion device should be viewed within this framework.
This article documents frequent gifting by online shop owners, intended to secure positive ratings and rankings from buyers. I demonstrate that buyers are ambivalent about this type of gifting. They often understand it as a form of strategic giving, a rational move by shop owners to influence the objectivity of reputation systems. Yet, they also treat this type of exchange as a gift exchange, meant to perform identity and establish social ties, ephemeral and weak as they might be, and they sometimes even react with reciprocal giving, in addition to the positive ratings.
Literature Review
The Rise of the Platform Economy
For the past two decades, the platform economy has been changing the way we work, communicate, trade, and perform leisure activities (e.g., Van Dijck et al., 2018). These infrastructural changes have not escaped the attention of scholars in such diverse fields as sociology, communication, and business administration. Sociologists of work treat online platforms mainly as sites of work and employment (Schor et al., 2020; Vallas & Schor, 2020), as the basis of the gig economy (Aloisi, 2016; Cherry & Aloisi, 2017; Flanagan, 2017), as a site of emergent forms of algorithmic control and new forms of workers’ resistance (Newlands, 2021), and as a major challenge for labor unions and government regulation of work and employment (Finck, 2017). Economic sociologists and business scholars depict digital platforms as trading arenas, employing key theoretical concepts such as market uncertainty (Beckert & Bronk, 2018), trust (Abrahao et al., 2017), and reputation systems (Diekmann et al., 2013). Communication scholars examine, for example, a broad spectrum of social media use, including the affordance of social media platforms (Bucher & Helmond, 2017; Helmond, 2015) and the agency of social media users trying to protect their privacy (Hargittai & Marwick, 2016). A crucial element of the social foundations of trade platforms, according to scholars in all of these fields of study, is reputation systems, central also to this article because of the elaborate gift economy that coalesces around them.
Reputation systems further trust among sellers and buyers and trigger trade, and their important role has attracted considerable research attention (Abrahao et al., 2017; Diekmann et al., 2013). Studies have traced the effects of a seller’s purchasing history on prospective buyers (Ye et al., 2013) and the role played by feedback comments in building buyers’ trust (Pavlou & Dimoka, 2006). Obviously, these systems are subject to manipulation, by traders as well as by those organizing the trade. Cochoy and Dubuisson-Quellier (2013), for example, study “market work” in online marketplaces, conducted by professionals such as marketing experts, who shape not only consumers’ tastes but also their judgment devices. Offline and online marketplaces can categorize goods in different ways (Hsu et al., 2009) and establish standards and tools for evaluating quality (Podolny & Hsu, 2003). One option presented in the literature is to have third-party agencies perform certifications or verifications of the “trustworthiness” of a platform (Cardoso & Martinez, 2019). Customer ratings of Uber drivers are also critically examined, highlighting their disparate impact on employment relations (Rosenblat & Luke, 2016). By using reputation systems, customers also become unpaid control agents, part of the platform apparatus meant to supervise and sanction unsatisfactory shop owners. This practice can be seen as a technologically underpinned expansion of the use of fake customers as monitors of the quality of service in offline enterprises (Fuller & Vicki, 1991). Scholars have described reputation systems as trust-building mechanisms, since the scores of individual shop owners are presented to all buyers and support their purchasing decisions. Reputation systems produce increasingly sophisticated scores and measures of shop owners, and are also described as a means of producing certified knowledge—for example, in the form of standards (e.g., Banks, 1963) calculated and displayed by the platform’s algorithm. Online reputation systems are said to partly substitute for price as the main market signal (Aspers & Darr, 2022). Rating systems can also be seen as a form of communication between sellers and buyers (Esposito & Stark, 2020) and gifting surrounding reputation systems is part of this communication process. I now turn to a review of the literature on gift theory, that will frame and inform data analysis.
The Persistent Entwining of Gift and Commodity Exchange in Offline and Online Marketplaces
The literature on gifting in offline marketplaces mostly grapples with the question of the persistent entwining of commodity and gift exchange. The association of gifts with preindustrial “clan society,” and of commodity exchange with “class society” in the capitalist era (Gregory, 1982), was rejected in later work (Parry, 1986) and replaced by the claim that gift and commodity exchange co-exist in contemporary markets, and that both involve a combination of self-interested and communal forms of behavior. Instead of their historical separation, it is the exact nature of the entwining of gift and commodity exchange in different types of contemporary markets that has attracted researchers’ attention in the fields of economic sociology and anthropology (Bird-David, 1997; Bird-David & Darr, 2009; Godelier, 1999; Herrmann, 1997). The co-existence of gift and commodity exchange has deep historical roots, and historians have systematically described how gifting is deeply embedded in distinct forms of normative frameworks that govern market exchange (Fontaine, 2014; Zemon Davis, 2000).
Early studies of gifting inside market exchange focus on the economic periphery, such as the economy of blood donations (Titmuss, 1971), gifting among members of the scientific community (Hyde, 1983), and the role of gifts in tobacco auctions (C. W. Smith, 1990, p. 63) and in garage sales (Herrmann, 1997). With time, research on gifting shifted closer to core capitalist markets, with a growing number of studies of the entwining of gifting and commodity exchange in industrial markets (Darr, 2006) and mass consumption settings (Bird-David & Darr, 2009). Other recent studies of contemporary gifting, and in digital markets, include online music sharing (Giesler, 2006) and gifts in the art market (Velthuis, 2003). Most recent studies wish to explain why and how gift and commodity exchange coexist in contemporary mass consumption markets. Explanations for this entwining can be grouped into three streams: (1) gifts that constitute the social infrastructure of markets; (2) gifting as a venue for expressing social identity, economic standing, and emotions in markets; and (3) gift-giving as a material and symbolic resource that can be employed and manipulated by sellers and buyers as part of capitalist exchange. The separation between these streams is purely analytical, and some studies of gifting in markets combine different streams in their empirical analysis. The different streams provide distinct ways of conceptualizing and explaining gifting inside online marketplaces, and this study builds on this literature and also extends it through the notion of the “conversion device.”
A central premise of contemporary studies of gifting in markets is that this form of exchange produces and reproduces market ties. These ties are deemed essential for the ongoing exchange of goods and services. According to scholars in this research stream, the entwining of gift and commodity exchange derives from the need to produce social ties based on trust, reciprocity, and obligation (Darr & Pinch, 2013) to facilitate selling and buying. Perceiving gifting as a means to constitute social foundations in markets builds on a long tradition in gift theory, one that postulates that gifts play a reproductive role in society at large and help maintain a broader moral order (Cheal, 1986; Zemon Davis, 2000). A wide range of ties, scholars argue, are produced and reproduced by way of gifting, ranging from kinship and friendship ties (Cheal, 1986; Joy, 2001; Komter, 2007; Yan, 1996) to relations of authority between workers and their superiors in Japan (Daniels, 2009), as well as inter-organizational relations in the Danish bio-tech industry (Kreiner & Schultz, 1993), ties to the local community through corporate philanthropy (Lombardo, 1995), and ties between expatriates and their home countries that facilitate inward investments (Lainer-Vos, 2012). Of all the explanations for the entwining of gift and commodity exchange, this is the most general, and the most empirically grounded.
2. Gifts as a means for expressing emotions and performing identity and social status
In an attempt to explain the coexistence of gift and commodity exchange in contemporary markets, this research stream draws on Mauss’ (1925/1954) discussion of the inalienability of the gift, as well as the more current school of social embeddedness of economic activity (Granovetter, 1985). Here, the gift carries with it to the receiver something of the giver, and thus holds a strong symbolic value. This second stream attempts to move beyond a purely economic, rational, and functional model of gifting in markets and to utilize a broader perspective developed in Belk and Coon’s (1993) theory of consumption behavior, which integrates rituals, symbolism, moral judgments, and even the performance of identity (see also Giesler, 2006; Weinberger & Wallendorf, 2012) into the discussion of gifting in markets. Importantly, scholars within this research stream acknowledge that some forms of gifting in markets adhere to the rational and functional model presented by economists; yet, they argue, additional forms of gifting are expressive in nature, including the reproduction and performance of power relations and social distance (see Vandevelde, 2000, for a typology of gifting). Cheal (1986, p. 433), who explored how class affiliation, kinship, and social status influence patterns of Christmas gifting in Canada, captures the essence of this second stream on gifting, over and beyond a simply rational explanation, when stating that “the fact that important Christmas gifts are rarely used as social support suggests that the study of symbolic processes deserves much more attention.”
Some scholars treat gift-giving as a venue for buyers and sellers to express emotions such as gratitude and friendship as part of sales encounters, and for the performance of social identity and economic status (Darr & Pinch, 2013). Weinberger and Wallendorf (2012, p. 84), for example, assert that, despite a debate in the literature regarding the role of gratitude as a form of reciprocity in the contemporary gift economy, in the Mardi Gras celebration they studied, “expressions of gratitude prevail.” They argue that “beyond its immediate emotional impact, our analysis indicates that gratitude has an important structural outcome.” By that they mean that the expression of emotions via gifting has a real impact on the nature of markets and market exchange. Perceived power relations in markets can also be expressed by gifting, as in the example of a customer who invokes his economic affluence by post-sale gifting to a salesperson in a computer store, thus performing their relationship as hierarchical one (Darr, 2017, p. 104). In a similar vein, gratitude is an essential emotion in the process of conferring status on givers in market exchange, as historical research teaches us (Zemon Davis, 2000).
3. Gifting as a manipulable material and symbolic resource in markets
A third research stream is predicated on Bourdieu’s (2005) assertion that gift-giving in markets creates a relational space between the giver and the receiver. Here, the relational space builds on the broader socio-cultural institution of gifting, in which social bonds, and the norms of reciprocity and obligation, are germane to gifting. Expectations of delayed reciprocity, for example, in effect constitute a social tie that can be manipulated by both parties in a market transaction to achieve practical or symbolic ends. Bourdieu places the relational space between the giver and the receiver, thus paying attention to the dynamics between the two sides and to their varying interpretations of a specific gift exchange. In a similar vein, in this study I will pay attention to the interpretive frames of the giver and the receiver.
The performative aspect of gifting is also important in this research stream. Gifting in markets is influenced by behavioral scripts and rituals that are part of gifting in broader society (Darr & Pinch, 2013). Yet, in the context of market exchange, gifting is often subordinated to the logic of the market. It can be used to achieve higher profits or create an obligation to reciprocate, and can be employed to manipulate buyers to close deals (Darr, 2017). The potential for manipulation via gifting derives directly from the conflicting scripts and justifications that are embedded in market gift-giving. An anecdotal, yet illuminating, example appears in Bird-David and Darr’s (2009) study, in their discussion of the mass gift, a hybrid form combining elements of gifts and commodities. In this example, a buyer is told that she will get a football as a gift if she purchases commodities in the sports shop to the amount of 500 shekels or more. Instead of accepting this mass gift, the buyer starts haggling, saying that she wants a shirt as a gift instead, and finally asks to transform the mass gift into a price reduction. As the authors note, one can see how market actors oscillate between the ideal-typical view of gifts in broader society, in which a gift symbolizes a personal social bond and should be tailored to the receiver’s needs, and the very practical and rational discourse of cost-effectiveness.
Gifting and Normative Frameworks of Market Transactions
Historically, different types of gifting were framed by distinct normative frameworks, motivated by a plethora of factors, and designed to achieve distinctively different goals. Compared with contemporary gifting, in some ancient societies the interpretive normative space of gifting was reduced, since different types of gifts were afforded different words and hence different associated meanings. For example, Fontaine (2014, p. 10) suggests that the ancient Greeks had separate words for different types of gifts. “Those derived from the root do: dos, doron, dorea, and dosis,” she writes,
convey the idea of a gift that allows the establishment of profitable relations. Tim’e refers to a gift as a contractual service, imposed by the obligation of a pact, an alliance, a friendship or hospitality; it is the obligation of the host (xeinos), that of the subjects toward the king or a god, or then a service because of an alliance.
Possibly due to the modern romantic depiction of gift-giving, we no longer clearly demarcate these different meanings of gifting. Still, two normative frameworks, one rational and calculative, the other more expressive and reciprocal, continue to co-exist in the meaning actors attribute to gifting today, specifically inside market exchange.
The exact meaning associated with gift-giving also changes with the type of gifting and with socio-economic developments. The connection between normative frameworks and gift-giving crystallizes in a study of nascent capitalist markets in early modern Europe (Fontaine, 2014). This study depicts opposing normative frameworks that shaped market practices in 16th-century Europe. One framework, supported by an elaborate gift exchange, reflected the old feudal order, with underlying norms such as social hierarchy, honor, and friendship shaping economic practices. The other normative framework, which depicted gifts in economic life negatively—that is, as a form of a bribe—reflected emerging capitalist ideas and practices, and promoted rational reasoning, the maximization of personal utility, and impersonal market relations that were intended to replace the feudal order underpinned by gifting (Fontaine, 2014). The persistent entwining of commodity and gift exchange, I argue, suggests that gifts represent more than feudal values and have a more fundamental role within capitalist markets.
Reflecting on contemporary market exchange, Thompson (2003) identifies two distinct normative frameworks that coexist within mass consumption markets. The first, which Thompson dubs “the restricted economy of productivity,” promotes values such as efficiency and utility, as well as arm’s-length market ties and the impersonality of the market. This normative framework largely builds on economists’ view of markets as composed of the individuation of actors, the maximization of personal utility, and the formal modeling of market exchange. Through this framework, gift-giving can be seen as subordinated to market logic, and functions as an instrumental and rational means of promoting commodities and creating a limited obligation to reciprocate by closing deals (Darr & Pinch, 2013).
Thompson, largely building on arguments about the social embeddedness of economic activity, dubs the second normative framework “the general economy of excess.” This external normative framework is integrated into markets and economic practice, and merits social bonds, reciprocity, loyalty, and friendship, as well as the expression of emotions inside market exchange (see Bandelj, 2009, for a discussion of emotions inside markets). As Thompson (2003, p. 94) further argues, the economy of excess might include the expression of moral obligation, using sales encounters for the performance of economic might, and even the public destruction of wealth. In this approach, gifting in markets is perceived as a means for sellers and buyers to express moral obligations and emotions such as gratitude and friendship, perform their social identity and socio-economic status, and rectify maltreatment of buyers or salespeople (see Darr & Pinch, 2013; Herrmann, 1997). On the level of capitalist economy, McGoey (2018) treats sovereign debt forgiveness, within the broader theoretical notion of economy of abundance, as a form of gifting expressing economic might and with reference to Marcel Mauss’ work.
This article argues that gifting in markets contains elements of both normative frameworks. Furthermore, the empirical materials lend support to the claim that gift-giving, when performed in online marketplaces, allows economic actors to easily convert one normative framework into the other, to promote a wide range of interests, to make sense of their own motives and actions and those of their exchange partners, and to perform their unique identity. It is also assumed that sellers and buyers who engage in market gifting do so to improve their market position vis-à-vis their exchange partner, but also as an expressive means of communication.
Research Design and Methods
This empirical and exploratory study was designed to provide a broad and comparative depiction of buying and selling in online marketplaces, with an emphasis on gifting practices. It is based on 54 in-depth interviews, primarily with buyers and shop owners operating in the Israeli platform economy. A snowball sampling technique was used, with an emphasis on multiple foci, to avoid the danger of the interviewees all coming from a small number of cliques. At the core of the study was Etsy, an online marketplace dedicated to the sale of arts and crafts. Etsy was founded in 2005, with the declared ambition to create a global marketplace and to attract large numbers of artists and craftspeople who wished to open an online shop. Etsy’s definition of what constitutes handmade items, craftsmanship, and vintage objects has changed over the years, and the type of artifacts offered in this digital marketplace has changed accordingly. Etsy exhibited rapid growth, and in 2007 was already reporting 300,000 deals on its platform. Due to a crisis affecting its giant competitor, eBay, in 2007–2008, Etsy began to establish itself as a leading global platform for trade in arts and crafts. To differentiate itself from eBay, Etsy declared that it would strive to create an active community of sellers and buyers (Pace et al., 2013) and would focus on small workshops, private craftspeople, and fashion and jewelry designers. In late 2016 and early 2017, Etsy introduced a peer-to-peer system that allowed sellers to communicate not only with interested buyers but also among themselves, thus promoting social ties and a sense of a community. In addition, the peer-to-peer system enhanced the rating system and allowed buyers to respond more easily to other buyers’ reviews of virtual stores and to communicate with one another through this venue.
All shop owners who were interviewed for this study operated an Etsy shop, and some of them also operated shops on other platforms and independent shops, a fact that allowed them to compare their experiences of selling in different arenas. One of the Etsy shop owners was asked to compile a log of all transactions she conducted during one month, and I had access to anonymized correspondence between market actors related to some of these transactions. She also documented all instances involving gift-giving as part of transactions. Some of the buyers’ comments and rankings of this particular shop were also documented. Buyers who were interviewed, mainly graduate students in their late 20s and early 30s, had previous experience in buying online, on Etsy as well as on other platforms. When I present excerpts of interviews with buyers about gifting practices, I clarify whether the field data pertain to Etsy or more generally to online marketplaces. Online store designers, online marketing experts, photographers, and copywriters were included in the sample because they provide valuable insights into the network of professionals supporting online buying and selling. Table 1 breaks down interviewees by market-related role.
Breakdown of Interviewees by Market Role or Occupation.
In the semi-structured interviews, among broader questions about the experience of buying and selling online, attention was paid to market actors’ gifting practices and their perceptions of gift-giving. The average interview lasted about 40 min. Most interviews were tape-recorded and transcribed in full. In a few instances, notes were taken during interviews and were later expanded on a computer. The majority of interviews were conducted in Hebrew by two research assistants. Interviews with some individuals of Russian origin were conducted in Russian and then translated into Hebrew by the Russian-speaking interviewer. The interview excerpts that appear in this article were translated from Hebrew into English by the author. All transcribed interviews were compiled into a single data set for coding and analysis. The author also compiled the questionnaire used in the study, supervised the interviews, and conducted data analysis.
Data analysis was designed to systematically explore the ritualistic and discursive elements of gifting in online markets. The initial analysis of the empirical material was based on grounded theory (e.g., Strauss & Corbin, 1998), which requires interpolation between theoretical concepts and empirical analysis. Based on Tavory and Timmermans (2014), the second round of data coding included an “abductive” extension. The broader theoretical framing and the concrete theoretical terms used also guide the creation of more fine-grained categories. Thus, our analysis is grounded not only in the interplay between the field data and the grassroots theory but also in the broader theoretical framing on gift-giving that we bring to the field. Data coding began with the construction of broad descriptive categories, such as “instances of gift-giving” and “types of gifts offered in online selling and buying.” More fine-grained coding then took place within each category, and hierarchical relations among the categories were established.
Findings
The most general finding is that a flourishing gift economy exists in the online marketplace studied. The array of gifting practices is partly captured in the transaction log kept by one of the shop owners, mentioned above. The log documents the trade activities of one shop owner, and no generalization can be made based on one example. Yet, the log gives us proof of the existence of gifting in online marketplaces and a sense of the intensity of gifting that takes place there. The log documents, when applicable, the types of gifts associated with specific transactions. In this log, I found different types of gifting, and in a follow-up conversation, I asked the shop owner to explain the reasons behind her gift-giving to buyers. According to her account, buyers who made large first orders received an extra item in the shipment, usually a T-shirt, as a gift. Here, gifts are employed to evoke reciprocity and a limited obligation to make repeated purchases. This form of gifting can also be conceptualized as an expression of gratitude by the shop owner for a large order. Returning customers received gifts in appreciation of their loyalty. These were also extra items designed by the shop owner. Finally, the most common form of gifting included a small, handmade item, meant, according to the designer, to encourage buyers to provide the seller with positive feedback and also to encourage them to make a repeat purchase. These were standard cloth bags handmade by the fashion designer, bearing the designer’s logo, that accompanied all shipments of the designer’s products. Importantly, the designer’s wish to secure a positive rating and possibly a positive written review remained tacit, and the bags were not even explicitly presented to buyers as a gift. Yet, the fashion designer described them in an interview as such.
In the following pages, I rely on interviews with shop owners and buyers, and present the different types of gifts that I identified in digital marketplaces. I first examine if and how gifting is employed to try and constitute basic and ephemeral market ties. Then, the article describes and explains how gifting provides a venue for the performance of identity and the expression of emotions in the digital marketplace. Finally, I focus on the thriving gift economy surrounding the reputation system and demonstrate how gifting serves as a translation device.
Constituting Ephemeral Social Ties in the Anonymous Online Marketplace
The most general explanation for the entwining of gifting practices and commodity exchange in contemporary markets is that gifts create social ties, mostly ephemeral and based on a limited obligation to reciprocate. These ties provide the social infrastructure that enables products and services to change hands. Contractual and promotional gifts provide the most basic empirical example. These types of gifts are offered to buyers in the anonymized online marketplace, either by the platform or by the individual shop owners, to create an initial connection with individual buyers and to entice them to trade through the platform or to visit a specific virtual store. Contractual gifts build on the socio-cultural meaning of gifts in broader society, and sellers deploy this to try and obligate potential buyers to reciprocate by buying. An Etsy shop owner described this type of gifting:
Do you use gifts to encourage customers to buy in your shop?
First, I have all kind of sales. There is, for example, an Etsy site called “On Sale” that allows you to offer price reductions on part or all of your products, and they will publish the sale for you for a limited period. But you need people to search on Etsy those shops that offer price reductions.
In this excerpt, the shop owner was asked about gifts and spoke about price reduction, probably reflecting the very pragmatic and instrumental use of the contractual gift. A student at a technical university who often buys online further explained his experience with gift-giving online:
Sometimes they [shop owners] write on their front page that you will receive a gift with the product [you purchase]. Let’s say when I ordered a cellular phone, they sent me a special water-proof bag with it, that allows you to take photos underwater.
In this example, the shop owner explicitly uses the term “gift” to encourage a potential buyer to purchase products. A sense of confusion regarding the contractual gift is apparent in the following example from an interview with another buyer, relating to a purchase on Etsy:
When I ordered the Charm [type of Jewel] I received another one as a gift. There was no question about it: When you purchase two [Charms] you get the third as a gift.
I see, so you knew about it in advance?
Yes, when you first enter [the online shop] you see: “Two plus one.” Then when you are ready to pay you have your [virtual] shopping cart, and it was written above it: “You get a gift on each purchase.”
This is a clear example of a contractual gift meant to boost sales. Note that according to this account, the shop owner, in the formal advertisement, shifts from a description of the extra Jewel as part of calculated discourse—that is, when speaking of it as a “two plus one” promotion—to a depiction of it as gift. In yet another example, a buyer described the array of contractual gifts offered on different trade platforms by different online shops:
Were you offered any gifts when shopping in virtual shops?
Mostly, these are not really gifts, I mean they add something [to your order], something cheap,
And when do you realize that you are entitled to a gift? At the beginning?
Yes, but this is, this is not really a gift, it is more of a supplement.
This buyer was asked about gifts she received when shopping online. A sense of confusion emerges from her answer. The speaker is aware of the shop owners’ wish to present this type of giving as gifting, but is reluctant to accept this framing, calling it instead “something cheap” and later a “supplement.” She treats the rhetoric accompanying this type of giving as false, thereby rejecting any sense of obligation to reciprocate. Yet, she seems to express a sense of entitlement to the extra item, partly accepting its nature as a gift. This type of tension between an awareness of false rhetoric and a sense of entitlement to receiving a gift with the purchase is also echoed in many of the examples of the mass gift (see Bird-David & Darr, 2009).
Shop owners on Etsy also use gifts to try and widen their clientele. This type of gifting is very common in offline as well as online selling, and elucidates how gifting can create the most basic social infrastructure for trade by building on buyers’ social capital. One shop owner on Etsy explained,
I just launched a new deal. Whoever brings a friend, who ends up buying one of my products, receives a gift from me. I give a few options for a gift.
Can you tell me what the options are?
A scarf or a belt I make.
This shop owner offers contractual gifts, one of her handmade products, and employs her buyers’ social capital to reach new clientele. On Etsy, the contractual gift is often a handmade product, possibly reflecting the values of the platform. The use of gifts to encourage existing clients to employ their social capital to reach new clients is also widespread in offline markets, a key example being Tupperware parties (Biggart, 1990). Importantly, buyers rarely treat this form of gifting as a “real gift,” and typically frame it as nothing more than a promotional device. Yet when the promotional gift is made by hand, it adheres more strictly to the behavioral scripts associated with gift-giving in broader society, as it transfers something of the giver to the receiver. The next type of gifting in online marketplaces I discuss is more personal in nature, more closely related to scripts of gift-giving in broader society, and is meant to express the identity and emotions of market actors.
Performing Identity and Expressing Emotion Through Gift-Giving
This study finds that expressive gift-giving is common in the online marketplace studied, and is often made explicit through verbal explanations accompanying the gift. The strongest evidence comes from a fashion designer’s log of all transactions during one month. The expressive aspects of gifting are most apparent in responses and post-sale gifting by buyers. In a few cases, the fashion designer’s buyers on Etsy, following the receipt of a shipment of items they ordered, responded by post-sale gifting and performed their own identities as artists or creative people, or expressed a more general appreciation for creativity as a value. A key example is a buyer who, after receiving the latest shipment, sent the fashion designer a photo of an enamel bowl she created with the fashion designer’s logo inscribed onto it, with the accompanying words “Je t’aime.” Here, the buyer wanted to perform her identity as an artist to the fashion designer, and at the same time to convey a positive sentiment toward her. Another example pertains to a post-sale e-mail sent to the fashion designer with a photo of an infant lying in his crib with a pillow bearing the face of David Bowie next to him: “Our little Bowie fan is finally big enough to appreciate your pillow,” the buyer wrote, “so I thought I would share. Stay creative!” The same fashion designer was asked whether she ever received a gift from a buyer:
One of my customers from New Zealand sent me a picture of herself, wearing my shirt, smiling, against the background of wonderful view.
Why do you think she sent you this photo?
She wanted to show me how satisfied she is.
Note that the interviewee was asked about gifts and chose to refer to the photo and accompanying e-mail. She interprets this form of gifting as an expression of gratitude and appreciation by her buyer.
Based on the interviews, the range of emotions expressed in online marketplaces through gifting is wide. For example, one buyer spoke about a shop owner who sent him a gift with the item he purchased, to compensate and to express regret for the long delay in delivery. This might also be seen as a defense strategy against negative feedback. Indeed, a unique feature of trade on these types of platforms is the reputation systems that allow buyers to rank and rate shop owners. The elaborate gift economy that develops around these reputation systems and the role of gifting as a conversion device are discussed below.
Gifting as a Conversion Device in Online Marketplaces
I noted in the “Introduction” section that my main theoretical argument is that the socio-cultural institution of gift-giving that prevails in broader society serves inside the online marketplace as a conversion device, a flexible material and symbolic resource available for buyers and sellers. Gifting allows them to oscillate between distinct moral frameworks, according to their socio-economic interests. The role of gifting as a conversion device is presented in the following pages through examples related to the thriving gift economy surrounding online reputation systems.
The ability to provide customer feedback existed long before the digital age, yet platforms embed reputation systems into algorithms that offer buyers an easy way to rank and write reviews of shop owners, and present the reviews in real time to all other buyers. Buyers become active agents in reputation systems, as they are the content providers. Importantly, ranking systems can automatically produce increasingly sophisticated quantified measures of product quality and the trustworthiness of individual shop owners, present them to all buyers and sellers on the platform, and enable comparisons across all shop owners. By instituting reputation systems, platform owners wish to create an objective, formal, and quantitative measure of the trustworthiness of shop owners, to make it possible to compare them, and to help buyers to make educated purchasing decisions.
Shop owners adjust to the superimposed reputation systems and exercise social agency through gifting, as they wish to benefit from positive reviews. As one shop owner on Etsy explained, “I encourage clients to leave a feedback, since I want them to possibly help hesitant clients, those who are still debating: Yes or no?” At the same time, some of them felt that reputation systems were tilted toward the interests of buyers, as they were sometimes used to sanction shop owners. These ratings significantly affect the seller’s economic success or failure, and sometimes they also formed the basis for formal complaints. A shop owner explained,
Etsy has a feedback system in place, so the customer knows that if he [sic] fails to receive the merchandise, doesn’t get what he ordered, he can complain to Etsy and Etsy will protect him [sic]. They can launch a complaint and even get to the stage where they close your store. This is Etsy.
Through customer feedback, a built-in affordance of the algorithm, Etsy attracts buyers by providing them with protection against fraud. By reading and writing reviews, buyers can share their purchasing experiences with other buyers, but they can also complain to Etsy about unsatisfactory sellers. Sellers cannot avoid this control mechanism, but can complain when they feel that an unjustified piece of feedback was written by a disgruntled buyer or when a decision was made in favor of the buyers. As we shall see below, shop owners constantly tried to influence their ratings, and one means to do so is the elaborate gift economy they created around the rating system, an empirical reality that begs an explanation. In the following examples, I wish to demonstrate how some shop owners employ gifting to try and convert a normative framework based on objective, quantified, and formal measures of their products and trustworthiness into a normative framework based on reciprocity, obligation, and a limited sense of friendship. Buyers and sellers demonstrating their own agency in the face of a platform’s rules are not unique to online marketplaces, as Hargittai and Marwick’s (2016) study of privacy-protective behavior among users on social media shows. Yet on Etsy, shop owners employ a deeply entrenched socio-economic institution of gift-giving to try and shift the normative framework of buyers from that desired by platform organizers to a normative framework that serves their own desire for positive feedback.
Some of the online buyers who were interviewed reported receiving, in the shipments they ordered, additional small items that they didn’t order and that weren’t promised to them when they made the purchase. These items sometimes had a sticker attached to them bearing the word “gift.” The socio-cultural meaning of receiving a gift is shared by people across nationalities and cultures, but the relationship between the gift and soliciting favorable reviews sometimes remained implicit, and in other cases was explicitly spelled out. Rossman (2014) argues more generally that gifting in markets can be used by sellers to obfuscate that disreputable exchange is taking place, in our case the attempt to buy favorable ratings. Little interpretative space was retained when the sticker bearing the word “gift” explicitly asked the buyer to rate the seller favorably. It can be argued that explicit mention of the linkage between gifting and rating makes the stakes of a good reputation evident for the buyers (for the case of Uber, see Calo & Rosenblat, 2017). Yet, I argue that the extensive gifting by shop owners is meant in a deeper sense to shift the interpretation of rating and ranking from a calculative, rational, and objective means of evaluating them to an alternative framework underpinned by an obligation to reciprocate and with an emphasis on a personal social tie between them. The buyers often remained skeptical, and often partly or fully rejected this bluntly manipulative attempt to convert one normative framework into another. While shop owners described extra items they added to shipments as “gifts,” buyers’ interpretations of this type of giving, and the ensuing reciprocity and obligation it carried with it, varied. A 30-year-old graduate student, who often shops online, was asked about gifts she received accompanying items she ordered, and replied,
Sometimes I get a product, and no one promised any gift, and then I receive a gift inside the package. Usually it is a foolish item, that doesn’t cost much. For example, with my latest purchase I received a pair of earrings, very funny ones, that I would never wear. So I gave them to my friend’s daughter.
In this example, the speaker identifies the earrings she received as a gift. She mentions that these are typically cheap items, and doesn’t explicitly associate it with any obligation on her behalf to reciprocate. In yet another example, a buyer who purchased a drill received a set of drill bits. While acknowledging this type of exchange as a gift, he also did not make an explicit association between the gift and an expectation for him to write a favorable review.
The log recorded by a shop owner on Etsy reveals that the fashion designer sent a handmade cloth bag, which she defined as a gift, with each and every sale. The expectation that buyers will write positive feedback was never made explicit. The buyers had their own interpretive space to decide how to relate to these gifts. An old client of the fashion designer sent her an e-mail after she received the latest order of T-shirts. She first thanked the designers for what she called “awesome shirts,” and then expressed gratitude for the handmade cloth bags that were sent with the order. “I use every one of them,” she wrote. “Coloured pencils in one, various drawing supplies in all of them. Thanks again!” The client briefly reciprocated by offering a short positive review, but she mainly used the interpretive space created by gifting to perform her own identity as a fellow artist, through the description of her use of the handmade cloth bags. The interpretive flexibility and multiplicity of the use of gifting in online marketplaces is apparent here. Importantly, the client actively participates in the conversion of ranking and rating from an objective measure of trustworthiness to a framework highlighting a personal relationship with the shop owner, the expression of her own identity as an artist, and her personal gratitude.
Other interviewees stated that this type of gifting is explicitly meant to encourage them to provide the sellers with positive feedback. In the next example, from an interview with a graduate student in his late 20s, the association between the gift and positive feedback is clearly understood and overtly expressed:
I once purchased an item, and nothing was written next to it and no one promised anything, but when I received the item, I suddenly discovered that there is something extra inside.
In addition to what you ordered?
Yes, I don’t remember exactly what I purchased, but they added to the package a very nice pen, inside a box, like a pen given as a gift, a really nice pen, and the seller wrote: “This is a gift.” They do it since they want me to write a positive feedback.
The speaker expresses surprise when he discovers a pen he really likes, wrapped nicely in a box. What turns the object, the pen, into a gift is not just the note, but the attention to its wrapping, which is a marker of “real” gift according to accepted cultural scripts. The performative aspect of gifting is highlighted here when the speaker clearly identifies this ritual as related to gift-giving in broader cultural settings. The performance of ritualistic aspects of gifting was strong enough for him to remember the pen while forgetting what the product he purchased was. The speaker is explicit about the intent behind this form of gifting and feels that this gift carries a clear expectation, if not an obligation, to provide positive feedback. The materiality of the gift and the performativity of its wrapping are central elements of the seller’s attempt to convert the rational and objective underpinnings of reputation systems into a framework that is relational and based on social obligations.
Discussion and Conclusions
Online marketplaces grant market actors the technological affordance to conduct anonymous, atomized, and a-personal communication and trade with other actors coming from diverse ethnonational, cultural, and legal frameworks. In online trade, a variety of market devices makes it possible to compare prices, evaluate the reputation of sellers, and share your experience with other buyers without personal encounters. Yet, instead of reverting to minimal social engagement, actors in the online marketplace studied often choose to actively engage in computer-mediated social interactions, and to produce trade ties, weak and ephemeral as they might be. The thriving gift economy discovered by this study should be viewed as part of the ongoing efforts of actors in online marketplaces to socially engage. The material, ritualistic, and discursive elements of gifting at different junctures in the online sales process comprise the empirical core of this study, and demonstrate the varieties of socio-cultural interests of market actors, ranging from efficiency and economic rationality to expressivity and the performance of identity.
Patterns of gifting serve here as a diagnostic tool, a marker of deliberate attempts by market actors to socially engage. Thus, the findings contribute to the current academic interest in the social foundations of the platform economy and highlight situations in which personal ties and social engagement are required in online trade. In this endeavor, I build on previous insights from the literature grappling with the persistent entwining of gifts and commodity exchange in offline markets (Darr, 2017; Darr & Pinch, 2013). This literature finds that gifts are means of constituting the micro-foundations of markets, venues for expressing emotions and performing identity, and a flexible symbolic resource that can be manipulated by market actors to further an array of socio-economic interests.
My main finding is that gifting flourishes around online reputation systems on the online marketplace studied, possibly pointing to their central role on other trade platforms as well. Indeed, one can argue that ranking and rating has substituted for price as a main market signal (Aspers & Darr, 2022). Reputation systems are promoted by many online marketplaces. Importantly, these systems place shop owners at a disadvantage that hardly exists in offline markets. They grant buyers the ability to compare and promote and also to sanction shop owners and to display their reviews in real time to the entire community of buyers on the platform. Online marketplaces present reputation systems as part of a normative framework highlighting their objectivity, rationality, and transparency, a market device (Callon et al., 2007) that helps buyers to evaluate and calculate different aspects of the marketplace, and to protect themselves against fraud, and assists them in making educated purchasing decisions. Yet, shop owners exercise agency when employing gifting as a conversion device, a flexible socio-economic institution infused with ambiguities that allows them to try and convert the objective and calculative normative framework propagated by platform management into a normative framework highlighting reciprocity, obligation, and personal ties between particular sellers and buyers. Gifting is exercised in the online marketplace within a clear power grid, with platform organizers designing and executing the reputation system. The shop owners’ use of gifting as a conversion device should be viewed as an attempt to tilt the power relation in their direction.
The findings demonstrate that gifting as a socio-cultural institution contains elements of the two distinct moral frameworks, and mobilizing this socio-economic institution allows market actors to oscillate between these two frameworks according to shifting socio-economic interests. In one key example, the shop owners tried to employ gifting to shift buyers away from one normative framework and into another, but the buyers critically examine this form of gifting, at times describing it as purely strategic, while at other times appearing to accept the item as a more personal form of giving, as when they refer to the material and performative elements of gifting in broader society.
Much like in offline markets, gifting produces the micro-foundations of trade in the online marketplace studied in varying fashions and social depths. In the anonymous online marketplace, contractual and promotional gifts are employed to attract buyers to platforms and to specific online shops, and to constitute an initial and limited obligation to visit a shop and possibly purchase products. The contractual and promotional gifts sharply diverge from the performative aspects of gifting in broader society. These gifts are promised to prospective buyers from the onset, they are clearly meant to promote sales, and they often are not tailored to the particular needs or wants of buyers. Buyers in the online marketplace often reject the rhetorical presentation of the contractual gift as a form of gifting, and instead dub it a price reduction or promotional scheme. However, the role of gifts in producing the micro-foundations of the online marketplace goes beyond initial market ties, and is apparent also in the performance of emotions and identity through gifting.
This situated study cannot be generalized across all trade platforms or even all online marketplaces, and a few central findings deserve future research attention in additional trade platforms. The vibrant gift economy in the online marketplace studied points to a broad set of socio-economic needs and aims among market actors. Online marketplaces provide actors with a new technological playground that affords unique patterns of multilevel social communication and engagement through gift-giving. I demonstrate how, in addition to the use of gifts for promotions, gifting on Etsy is employed to perform identity and to convey emotions to the exchange partners, most of them geographically and socially distant. The most striking examples include post-sale gifting on Etsy, by means of which buyers perform their unique identities as artists, as creative people, or, more generally, as people who appreciate creativity. Emotions such as gratitude and appreciation were also conveyed through gifting.
The socio-cultural institution of gift-giving is omnipresent in multiple cultures and contains basic human values such as obligation and reciprocity, leading Mauss (1925/1954) to call it “a total social institution.” Its cross-cultural existence and relative stability, despite inherent contradictions, make gifting a useful symbolic resource, given the deep ethnonational, cultural, and legal cleavages separating buyers and sellers in the global online marketplace. Gifting provides market actors in the online marketplace with common ground to partly overcome these cleavages, to communicate, to personalize the exchange, and to oscillate, when required, between rational and expressive normative frameworks.
Footnotes
Acknowledgements
I wish to thank Ludmila Garmash and Liat Arad for research assistance.
Declaration of Conflicting Interests
The author declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: This study was supported by the Israel Science Foundation, agreement number 244/13.
