The Market for Evaluations
Christopher Avery and
Richard Zeckhauser ()
American Economic Review, 1999, vol. 89, issue 3, 564-584
Recent developments in computer networks have driven the cost of distributing information virtually to zero, creating extraordinary opportunities for sharing product evaluations. The authors present pricing and subsidy mechanisms that operate through a computerized market and induce the efficient provision of evaluations. The mechanisms overcome three major challenges: first, evaluations, which are public goods, are likely to be underprovided; second, an inefficient ordering of evaluators may arise; and third, the optimal quantity of evaluations depends on what is learned from the initial evaluations.
JEL-codes: D83 L15 O33 (search for similar items in EconPapers)
Note: DOI: 10.1257/aer.89.3.564
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