Calendrier du 16 juin 2022
TOM (Théorie, Organisation et Marchés) Lunch Seminar
Du 16/06/2022 de 12:30 à 13:30
Salle R1-15, Campus Jourdan 75014 Paris
NG Robin (UC Louvain)
Ratings and Reciprocity
Recent evidence suggests online ratings and reviews are intrinsically motivated and reviewers reciprocate offers of sufficient value-for-money with good ratings. We incorporate reciprocity into a model of ratings, where consumers rate positively if they receive a high value-for-money and perceive firms to be sufficiently kind. Our key mechanism is that to benefit from reciprocity, firms offer lower prices in exchange for good ratings, increasing future prices and profits. Firms reinforce this mechanism and are more likely to induce good ratings when i) consumers exhibit a stronger sense of reciprocity or when ii) it is easier for consumers to leave ratings. This way, the presence of reciprocity can explain the documented phenomenon of rating inflation, and less informative ratings, especially as it becomes easier to leave ratings. We discuss how further marketplace features affect the reciprocity mechanism and the informativeness of ratings: First, a two-sided platform might indeed choose to make it easier for consumers to rate, thereby undermining the informativeness of ratings. Second, many platforms screen the quality of sellers and kick out low-quality sellers. We characterize when such quality screening reduces or reinforces the informativeness of ratings. Third, competition between sellers leads to lower informativeness of ratings. Finally, we show that more-informative ratings do not necessarily translate to larger consumer surplus.