Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations

Paul Belleflamme and Martin Peitz

No 1806, AMSE Working Papers from Aix-Marseille School of Economics, France

Abstract: The rise and success of digital platforms (such as Airbnb, Amazon, Booking, Expedia, Ebay, and Uber) rely, to a large extent, on their ability to address two major issues. First, to effectively facilitate transactions, platforms need to resolve the problem of trust in the implicit or explicit promises made by the counterparties; they post reviews and ratings to pursue this objective. Second, as platforms operate in marketplaces where information is abundant, they may guide their users towards the transactions that these users may have an interest in; recommender systems are meant to play this role. In this article, we elaborate on review, rating, and recommender systems. In particular, we examine how these systems generate network effects on platforms.

Keywords: platforms; network effects; ratings; recommender systems; digital economics (search for similar items in EconPapers)
JEL-codes: D43 L13 L86 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2018-02
New Economics Papers: this item is included in nep-ict, nep-mkt and nep-pay
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.amse-aixmarseille.fr/sites/default/fil ... /wp_2018_-_nr_06.pdf (application/pdf)

Related works:
Working Paper: Inside the engine room of digital platforms: Reviews, ratings, and recommendations (2018)
Working Paper: Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aim:wpaimx:1806

Access Statistics for this paper

More papers in AMSE Working Papers from Aix-Marseille School of Economics, France AMU-AMSE - 5-9 Boulevard Maurice Bourdet, CS 50498 - 13205 Marseille Cedex 1. Contact information at EDIRC.
Bibliographic data for series maintained by Gregory Cornu ().