Sharing Economy, Platforms and Crowds
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Paper Number
1530
Paper Type
short
Description
There is growing evidence showing that sellers manipulate product reviews either by embellishing themselves or by snipping at their competitors. We develop an analytical model to examine the effect of product prices and platforms’ commission on sellers’ review-manipulating strategies and profits under the “Verified Purchase” policy (e.g., Amazon.com). We find that under this policy, a higher platform’s commission rate may discourage both two types of review manipulation. As for the price effect, sellers’ snipping increases with their prices but decreases with competitors’ prices while their embellishment mainly depends on the commission rate. For the platform, we identify a non-monotone relationship between profit and the commission rate, which is driven by sellers’ review manipulation. Our results suggest that platforms should carefully set their commission rate to discourage sellers from manipulating reviews and meanwhile maintain a certain level of profit under the “Verified Purchase” policy.
Recommended Citation
Zhu, Cungen, "Fake Reviews with “Verified-Purchase” and Commission Fee: Embellishment vs. Sniping" (2021). ICIS 2021 Proceedings. 4.
https://aisel.aisnet.org/icis2021/sharing_econ/sharing_econ/4
Fake Reviews with “Verified-Purchase” and Commission Fee: Embellishment vs. Sniping
There is growing evidence showing that sellers manipulate product reviews either by embellishing themselves or by snipping at their competitors. We develop an analytical model to examine the effect of product prices and platforms’ commission on sellers’ review-manipulating strategies and profits under the “Verified Purchase” policy (e.g., Amazon.com). We find that under this policy, a higher platform’s commission rate may discourage both two types of review manipulation. As for the price effect, sellers’ snipping increases with their prices but decreases with competitors’ prices while their embellishment mainly depends on the commission rate. For the platform, we identify a non-monotone relationship between profit and the commission rate, which is driven by sellers’ review manipulation. Our results suggest that platforms should carefully set their commission rate to discourage sellers from manipulating reviews and meanwhile maintain a certain level of profit under the “Verified Purchase” policy.
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Comments
09-Crowds