Seller-paid Ratings
نویسنده
چکیده
We study the interaction between the seller of a product, the buyers who are uncertain about the product quality and a rating agency who observes the quality and sends signals about it. Assuming the seller-pays model of rating agency, we analyze the cases in which the payment to the rater is publicly disclosed and fixed, publicly disclosed and rating-contingent, private and rating-contingent. First, we characterize all possible equilibrium partitions of the underlying quality range into ratings in these three cases. We then characterize the seller’s optimal ratings in the three cases. Finally, we perform welfare analysis and discuss regulation.
منابع مشابه
An Incentive Mechanism for Promoting Honesty in E-Marketplaces
To explain, the ratings provided by advisors are possibly unfair. Buyers may provide unfairly high ratings to promote the seller. This is referred to as “ballot stuffing” (Dellarocas 2000). Buyers may also provide unfairly low ratings, in order to cooperate with other sellers to drive a seller out of the marketplace. This is referred to as “bad-mouthing”. Besides the problem of unfair ratings, ...
متن کاملRepRev: Mitigating the Negative Effects of Misreported Ratings
Reputation models depend on the ratings provided by buyers to gauge the reliability of sellers in multi-agent based e-commerce environment. However, there is no prevention for the cases in which a buyer misjudges a seller, and provides a negative rating to an original satisfactory transaction. In this case, how should the seller get his reputation repaired and utility loss recovered? In this wo...
متن کاملWhy do people rate? Theory and evidence on online ratings
The rapid growth of online retail in the last decade has led to widespread use of consumer-generated ratings. This paper theoretically and experimentally identifies influences that drive consumers to rate products and examines how those factors can create distortions in product ratings. By manipulating payoffs and effectively “deactivating” either the buyer or seller side of an artificial labor...
متن کاملDesigning Reputation Mechanisms for Efficient Trade
A seller in an online marketplace with an effective reputation mechanism should expect that dishonest behavior results in higher payments now, while honest behavior results in higher reputation—and thus higher payments—in the future. We study two widely used classes of reputation mechanisms. First, we show that weighting all past ratings equally gives sellers an incentive to falsely advertise. ...
متن کاملMarket Transparency, Adverse Selection, and Moral Hazard
We study how seller exit and continuing sellers’ behavior on eBay are affected by an improvement in market transparency. The improvement was achieved by reducing strategic bias in buyer ratings. It led to a significant increase in buyer satisfaction with seller performance, but not to an increase in seller exit. When sellers had the choice between exiting—a reduction in adverse selection—and im...
متن کامل