Prominence and reputation in online markets
(2023)
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Details
- Authors
- Supervisors
- Belleflamme, Paul
- Abstract
- This thesis aims to enhance our understanding of the novel business practices employed by online marketplaces to govern their ecosystems and how these practices influence competition and the welfare of users within the platform. In particular, this thesis studies issues related to how online marketplaces use prominence to influence consumers' purchasing decisions and the role of platform-specific reputation systems. The first chapter analyzes the incentives of intermediaries of grouping all the offers associated with a particular product on a single webpage and designating a default retailer prominently displayed in the “buy-box”. We find that intermediaries strategically use prominence to induce retailers to fiercely compete for the prominent display. This scheme mitigates double marginalization issues, maximizes demand, and allows the intermediary to replicate the market outcome of a multiproduct monopolist. The second chapter explores another dimension of prominence within online marketplaces, specifically focusing on how intermediaries display information or alternative products. These tools guide consumer choices and influence their perception of the products when comparing different offers by decreasing mismatch costs for the favored firm while increasing them for its competitor. We find that the asymmetric treatment can potentially increase the total industry profit and consumer surplus. The third chapter investigates the role of platform-specific reputation systems and how the impossibility of transferring ratings across platforms leads to lock-in effects and high switching costs for users. Through a lab-in-the-field experiment, we analyze how online workers respond to the introduction and increase of fees and how a reputation portability treatment can significantly increase the likelihood of switching platforms and improve online workers' working conditions.
- Affiliations
Citations
Ciotti, F. (2023). Prominence and reputation in online markets. https://hdl.handle.net/2078.5/29027