Online Reviews Matter: How Can Platforms Benefit from Online Reviews?

Online reviews mitigate uncertainty about product quality that is caused by information asymmetry. However, low-quality online reviews are not effective, while high-quality online reviews may raise costs. Unlike the previous studies, this paper develops a game-theoretic model to examine the feasibility and pricing of online review supervision mechanism for operators of platforms that are based on the ‘network externality’. The results reveal that platforms are not always benefited from online reviews. We provide a new perspective and give some preventive suggestions for platforms with a view to furthering sustainable development.

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Exclusivity as a Signal of Quality in a Market with Word-of-Mouth Communication

Review of Marketing Science ◽

10.1515/roms-2020-0022 ◽

2020 ◽

Vol 18 (1) ◽

pp. 99-115

Author(s):

Minoo Ashoori ◽

Eric Schmidbauer ◽

Axel Stock

Keyword(s):

Product Quality ◽

Word Of Mouth ◽

Theoretic Model ◽

High Quality ◽

Initial Stage ◽

Game Theoretic ◽

Game Theoretic Model ◽

Word Of Mouth Communication

AbstractIn some markets consumers seek exclusive consumption experiences, yet in these markets businesses sometimes market their goods widely and at low prices during an introduction period. We use a two-period game-theoretic model to provide a signaling explanation for this phenomenon. In our model, exclusivity-seeking consumers must infer product quality from its price and level of exclusivity in the initial stage. After purchase consumers communicate the true learned quality through word-of-mouth (WOM) so that the entire market becomes informed, including a group of new consumers whose size depends on the number of introductory purchasers and the strength of WOM. We show that a high-quality seller signals by marketing widely when the desire for exclusivity is intermediate and WOM is strong.

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Critical Rationalism and Scientific Competition

Analyse & Kritik ◽

10.1515/auk-2010-0204 ◽

2010 ◽

Vol 32 (2) ◽

Cited By ~ 4

Author(s):

Max Albert

Keyword(s):

Incentive Compatibility ◽

Quality Standards ◽

Theoretic Model ◽

Institutional Perspective ◽

High Quality ◽

High Quality Research ◽

Critical Rationalism ◽

Incentive Compatible ◽

Game Theoretic ◽

Game Theoretic Model

AbstractThis paper considers critical rationalism under an institutional perspective. It argues that a methodology must be incentive compatible in order to prevail in scientific competition. As shown by a formal game-theoretic model of scientific competition, incentive compatibility requires quality standards that are hereditary: using high-quality research as an input must increase a researcher’s chances to produce high-quality output. Critical rationalism is incentive compatible because of the way it deals with the Duhem-Quine problem. An example from experimental economics illustrates the relevance of the arguments.

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Stability in the informal value transfer systems: norms of trust or institutions of control?

Voprosy Ekonomiki ◽

10.32609/0042-8736-2017-3-120-130 ◽

2017 ◽

pp. 120-130

Author(s):

A. Lyasko

Keyword(s):

Social Control ◽

Institutional Economics ◽

Theoretic Model ◽

Transfer System ◽

Value Transfer ◽

Partner Interaction ◽

Game Theoretic ◽

Game Theoretic Model ◽

Informal Value Transfer System

Informal financial operations exist in the shadow of official regulation and cannot be protected by the formal legal instruments, therefore raising concerns about the enforcement of obligations taken by their participants. This paper analyzes two alternative types of auxiliary institutions, which can coordinate expectations of the members of informal value transfer systems, namely attitudes of trust and norms of social control. It offers some preliminary approaches to creating a game-theoretic model of partner interaction in the informal value transfer system. It also sheds light on the perspectives of further studies in this area of institutional economics.

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Faculty Opinions recommendation of A game-theoretic model for punctuated equilibrium: species invasion and stasis through coevolution.

Faculty Opinions – Post-Publication Peer Review of the Biomedical Literature ◽

10.3410/f.1012440.372002 ◽

2006 ◽

Author(s):

Vlastimil Krivan

Keyword(s):

Punctuated Equilibrium ◽

Theoretic Model ◽

Species Invasion ◽

Game Theoretic ◽

Game Theoretic Model

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Hollywood’s Movie Production Companies in Game Theoretic Model

SSRN Electronic Journal ◽

10.2139/ssrn.3609123 ◽

2020 ◽

Author(s):

Nargiz Mammadova ◽

Aygun Malikova ◽

Arzu Heydarova

Keyword(s):

Theoretic Model ◽

Game Theoretic ◽

Game Theoretic Model

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Augmenting Employees’ Efforts in Innovation

Arthaniti-Journal of Economic Theory and Practice ◽

10.1177/0976747921989171 ◽

2021 ◽

pp. 097674792198917

Author(s):

Nikita Jain

Keyword(s):

Theoretic Model ◽

Wrongful Discharge ◽

Equilibrium Level ◽

Game Theoretic ◽

Game Theoretic Model ◽

The Impact

Strong labour laws play a major role in motivating innovation among employees. It has been found in the literature that stringency of labour laws is positively linked with employees’ efforts in innovation, in particular, wrongful discharge laws (WDL). However, employees may also bring nuisance suits against employers. Usually, the result of these suits is that both parties settle with each other. Thus, even if employees are justly dismissed, they may be able to bring nuisance suits against employers and gain a settlement amount. This article investigates how the possibility of nuisance suits affects the impact of WDL on employees’ efforts in innovation. In this respect, a game-theoretic model is developed in the article to find the equilibrium level of employees’ efforts in the presence of nuisance suits, where there is a possibility of employees getting discharged from the firm. I find that if nuisance suits are a possibility, the stringency of WDL has no impact on employees’ efforts if defence cost of the firm is low; but for higher defence costs, WDL affects employees’ efforts. The efforts exerted by an employee are found to be weakly increasing in the defence costs of the firm.

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