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Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations

Paul Belleflamme () and Martin Peitz

Working Papers from HAL

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: digital economics; platforms; network effects; ratings; recommender systems (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mkt and nep-pay
Date: 2018-02
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01714549
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Working Paper: Inside the Engine Room of Digital Platforms: Reviews, Ratings, and Recommendations (2018) Downloads
Working Paper: Inside the engine room of digital platforms: Reviews, ratings, and recommendations (2018) Downloads
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