Ratings with Heterogeneous Preferences

Jonathan Lafky and Robin Ng

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We examine how product ratings are interpreted in the presence of heterogeneous preferences among both raters and consumers. Raters with altruistic motives should rate for the benefit of future consumers, however an ambiguity arises when preferences are heterogeneous. Multiple equilibria exist in which ratings may reflect the preferences of raters or the preferences of future consumers. In an online experiment, we examine how ratings are selected by raters and interpreted by consumers, and how information about rater preferences or product attributes can influence equilibrium selection. We show how both raters and consumers update their evaluation of what a rating represents in each environment, doing so in similar ways.

Keywords: Ratings and Reviews; Altruism (search for similar items in EconPapers)
JEL-codes: C91 D64 D83 L86 (search for similar items in EconPapers)
Pages: 35
Date: 2024-09
New Economics Papers: this item is included in nep-dcm, nep-exp, nep-ipr and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2024_594

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