An economic analysis of incentivized positive reviews

It becomes increasingly popular that some large online retailers such as Amazon open their platforms to allow third-party retail competitors to sell on their own platforms. We develop an analytical model to examine this retailer marketplace model and its business impact. We assume that a leading ret...

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Main Authors: CHEN, Jianqing, GUO, Zhiling, HUANG, Jian
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2018
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Online Access:https://ink.library.smu.edu.sg/sis_research/4332
https://ink.library.smu.edu.sg/context/sis_research/article/5335/viewcontent/An_Economic_Analysis_of_Incentivized_Positive_Reviews__1_.pdf
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Institution: Singapore Management University
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spelling sg-smu-ink.sis_research-53352019-05-16T09:28:07Z An economic analysis of incentivized positive reviews CHEN, Jianqing GUO, Zhiling HUANG, Jian It becomes increasingly popular that some large online retailers such as Amazon open their platforms to allow third-party retail competitors to sell on their own platforms. We develop an analytical model to examine this retailer marketplace model and its business impact. We assume that a leading retailer has both valuation advantage that may come from its reputation and information advantage that may come from its brand awareness. We find that the availability of relatively low-cost advertising through social media or search engine can effectively reduce the leading retailer's information advantage, and thus be an important driving force for its strategic decision to open its platform. Not only does the advertising option directly make small sellers more visible to consumers, but also incentivizes the online retailer to open its platform and dramatically increases small sellers' exposure, indirectly contributing to an even more prominent long tail phenomenon in e-commerce. 2018-12-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/sis_research/4332 https://ink.library.smu.edu.sg/context/sis_research/article/5335/viewcontent/An_Economic_Analysis_of_Incentivized_Positive_Reviews__1_.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Computing and Information Systems eng Institutional Knowledge at Singapore Management University Positive reviews electronic commerce cash-back rebate pricing decision Databases and Information Systems
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Positive reviews
electronic commerce
cash-back rebate
pricing decision
Databases and Information Systems
spellingShingle Positive reviews
electronic commerce
cash-back rebate
pricing decision
Databases and Information Systems
CHEN, Jianqing
GUO, Zhiling
HUANG, Jian
An economic analysis of incentivized positive reviews
description It becomes increasingly popular that some large online retailers such as Amazon open their platforms to allow third-party retail competitors to sell on their own platforms. We develop an analytical model to examine this retailer marketplace model and its business impact. We assume that a leading retailer has both valuation advantage that may come from its reputation and information advantage that may come from its brand awareness. We find that the availability of relatively low-cost advertising through social media or search engine can effectively reduce the leading retailer's information advantage, and thus be an important driving force for its strategic decision to open its platform. Not only does the advertising option directly make small sellers more visible to consumers, but also incentivizes the online retailer to open its platform and dramatically increases small sellers' exposure, indirectly contributing to an even more prominent long tail phenomenon in e-commerce.
format text
author CHEN, Jianqing
GUO, Zhiling
HUANG, Jian
author_facet CHEN, Jianqing
GUO, Zhiling
HUANG, Jian
author_sort CHEN, Jianqing
title An economic analysis of incentivized positive reviews
title_short An economic analysis of incentivized positive reviews
title_full An economic analysis of incentivized positive reviews
title_fullStr An economic analysis of incentivized positive reviews
title_full_unstemmed An economic analysis of incentivized positive reviews
title_sort economic analysis of incentivized positive reviews
publisher Institutional Knowledge at Singapore Management University
publishDate 2018
url https://ink.library.smu.edu.sg/sis_research/4332
https://ink.library.smu.edu.sg/context/sis_research/article/5335/viewcontent/An_Economic_Analysis_of_Incentivized_Positive_Reviews__1_.pdf
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