A theory of likes

Jean-Michel Benkert and Armin Schmutzler

No 448, ECON - Working Papers from Department of Economics - University of Zurich

Abstract: We study binary, non-strategic ratings when consumer preferences reflect a combination of objective quality differences between products and idiosyncratic taste. A rating then decomposes into objective and subjective content. Rating systems that are extremely strict or extremely lenient only convey objective content, maximizing consumer welfare when the population is not biased toward a particular product. With a biased population, less extreme rating systems that convey subjective content can be valuable. In many environments, a sales-maximizing platform prefers lenient rating systems, creating a conflict with welfare maximization.

Keywords: Recommendations; ratings; preference heterogeneity; information design; platform design; value maximization (search for similar items in EconPapers)
JEL-codes: D02 D47 D83 (search for similar items in EconPapers)
Date: 2024-08, Revised 2026-06
New Economics Papers: this item is included in nep-des and nep-mic
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.zora.uzh.ch/bitstreams/60f20efa-d6a6-496a-8a5a-486ec66d5c6d/download (application/pdf)

Related works:
Working Paper: A Theory of Likes (2026)
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:zur:econwp:448

Access Statistics for this paper

More papers in ECON - Working Papers from Department of Economics - University of Zurich Contact information at EDIRC.
Bibliographic data for series maintained by Severin Oswald ().