Online Reviews Matter: How Can Platforms Benefit from Online Reviews?

Xueke Du, Rui Dong, Wenli Li, Yibo Jia and Lirong Chen
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Xueke Du: School of Economics and Management, Dalian University of Technology, Dalian 116024, China
Rui Dong: School of Mathematics Sciences, Henan Institute of Science and Technology, Xinxiang 453003, China
Wenli Li: School of Economics and Management, Dalian University of Technology, Dalian 116024, China
Yibo Jia: School of Economics and Management, Dalian University of Technology, Dalian 116024, China
Lirong Chen: School of Computer Science, Inner Mongolia University, Hohhot 010021, China

Sustainability, 2019, vol. 11, issue 22, 1-20

Abstract: Online reviews mitigate uncertainty about product quality that is caused by information asymmetry. However, low-quality online reviews are not effective, while high-quality online reviews may raise costs. Unlike the previous studies, this paper develops a game-theoretic model to examine the feasibility and pricing of online review supervision mechanism for operators of platforms that are based on the ‘network externality’. The results reveal that platforms are not always benefited from online reviews. We provide a new perspective and give some preventive suggestions for platforms with a view to furthering sustainable development.

Keywords: online reviews; information asymmetry; cross-network externalities; Bayesian theory; analytical modeling (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:22:p:6289-:d:285054

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