will give a presentation on
The study of review systems has gained prominence with marketplaces, such as eBay, Airbnb and Amazon, and social media platforms, such as Facebook and Twitter. Today, there are marketplaces which focus purely on the provision of reviews, such as Google reviews, Yelp and TripAdvisor. The growing empirical evidence puts into question the exact usefulness of reviews, suggesting that ratings may be overinflated. New evidence also suggests that the provision of reviews are intrinsically motivated - by kindness towards sellers and other buyers. We develop what we consider to be the first theoretical model that attempts to explain the inflation phenomenon by incorporating kindness into a model for ratings. We find that there are multiple channels for ratings inflation and while ratings inflation may necessarily diminish the informativeness of ratings, it may not necessarily cause a reduction in consumer surplus.
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