<p>Product reviews have strong influence on customers’ purchase decisions. However, authenticity of these reviews may be compromised due to inflation by online sellers in an e-commerce supply chain. In this paper, we analyze the extent of product review inflation under scenarios where product is offered by third-party seller or platform. Specifically, we consider a model setup where an online platform exerts effort towards detecting review inflation, and consider two mechanisms to combat review inflation: (i) <i>Incentive mechanism</i>, where social planner pays some incentive to the platform if it detects and reports fake reviews, and (ii) <i>Liability mechanism</i>, where platform and third-party seller share the liability cost paid to customers if review inflation is detected. We find that the third-party seller may set higher inflation level under liability mechanism depending on customers’ ability to detect inflation. Furthermore, social planner may need to be more vigilant towards third-party seller compared to platform.</p>

错误:搜索内容不能为空,请输入英文关键词
错误:关键词超出字数限制,请精简
高级检索

Combating Fake Reviews over Digital Platforms: An Economic Analysis of Incentive and Liability Mechanisms

  • Ayesha Arora,
  • Tarun Jain

摘要

Product reviews have strong influence on customers’ purchase decisions. However, authenticity of these reviews may be compromised due to inflation by online sellers in an e-commerce supply chain. In this paper, we analyze the extent of product review inflation under scenarios where product is offered by third-party seller or platform. Specifically, we consider a model setup where an online platform exerts effort towards detecting review inflation, and consider two mechanisms to combat review inflation: (i) Incentive mechanism, where social planner pays some incentive to the platform if it detects and reports fake reviews, and (ii) Liability mechanism, where platform and third-party seller share the liability cost paid to customers if review inflation is detected. We find that the third-party seller may set higher inflation level under liability mechanism depending on customers’ ability to detect inflation. Furthermore, social planner may need to be more vigilant towards third-party seller compared to platform.