269. Regulating the manipulation in online reviews
Invited abstract in session WC-47: Game Theory in Retail I, stream Retail Operations.
Wednesday, 12:30-14:00Room: Parkinson B08
Authors (first author is the speaker)
| 1. | Xiaopei Zhao
|
| College of Management and Economics, Tianjin University |
Abstract
Problem definition: The presence of information asymmetry leads consumers to rely on product reviews for their purchasing decisions, which gives the low type seller the incentive to manipulate the review ecosystem, particularly by purchasing fake positive reviews, which influences consumer perceptions. Considering the manipulation by the seller, savvy consumers question the authenticity of reviews, and platforms may implement algorithms to detect manipulation. In response, the low type seller may adopt more sophisticated strategies to evade platform detection and consumer suspicion. Methodology/results: This study examines the interaction between the seller, consumers, and platform using a three-stage game model. The seller possesses private information regarding product quality, and this asymmetry influences the decision to manipulate reviews. We analyze how platform regulation impacts consumer behavior, seller strategies, and social welfare. Our findings shows that an increase in the platform's regulatory does not necessarily lead to an improvement in consumer surplus and social welfare. Managerial implications: Our model clarifies the underlying reasons for a platform’s adoption of various regulatory policies, while excluding the influence of objective factors, such as regulatory costs.
Keywords
- E-Commerce
- Game Theory
- Algorithms
Status: accepted
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