Bad News Turned Good: Reversal under Censorship

Aleksei Smirnov and Egor Starkov

American Economic Journal: Microeconomics, 2022, vol. 14, issue 2, 506-60

Abstract: Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such "naïve" consumers is not too large, then rational consumers treat any bad review that is revealed in equilibrium as good news about product quality. This makes bad reviews worth revealing and allows the seller to use them to signal his product's quality to rational consumers.

JEL-codes: D82 D83 L15 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/mic.20190379 (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20190379.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/mic.20190379.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Bad news turned good: reversal under censorship (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:aea:aejmic:v:14:y:2022:i:2:p:506-60

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/mic.20190379

Access Statistics for this article

American Economic Journal: Microeconomics is currently edited by Johannes Hörner

More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().