Inside the engine room of digital platforms: Reviews, ratings, and recommendations

Paul Belleflamme and Martin Peitz

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

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: D82 D85 L15 L81 L86 (search for similar items in EconPapers)
Pages: 33
Date: 2018-02
New Economics Papers: this item is included in nep-ict and nep-pay
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Citations: View citations in EconPapers (17)

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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)
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2018_004

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