TY - GEN
T1 - Fake reviews in online platforms and the effort to fight them
AU - Anguera Torrell, Oriol
AU - Aznar-Alarcón, J.
N1 - Publisher Copyright:
© The Author(s) 2021.
PY - 2023/8/1
Y1 - 2023/8/1
N2 - This paper proposes a model in which oligopolistic firms selling through an online platform can invest in creating positive fake reviews to increase their reputation and negative ones to harm that of their competitors. Therefore, oligopolistic firms' demand depends on the amount of positive and negative fake reviews. In this context, the online platform optimally chooses the effort to fight fake reviews and the fee it charges to online sellers for each transaction. The novelty of the model lies in incorporating the online platform's role in fighting fake reviews and its interplay with sellers' strategic behaviour. The model's main result is that the platform's effort has a positive impact not only on consumers' surplus but also on the oligopolistic firms' profitability. In its turn, the platform's optimal effort depends on exogenous parameters, including the demand's sensitivity to fake reviews.
JEL Classifications: D21, D43, L13, L81
AB - This paper proposes a model in which oligopolistic firms selling through an online platform can invest in creating positive fake reviews to increase their reputation and negative ones to harm that of their competitors. Therefore, oligopolistic firms' demand depends on the amount of positive and negative fake reviews. In this context, the online platform optimally chooses the effort to fight fake reviews and the fee it charges to online sellers for each transaction. The novelty of the model lies in incorporating the online platform's role in fighting fake reviews and its interplay with sellers' strategic behaviour. The model's main result is that the platform's effort has a positive impact not only on consumers' surplus but also on the oligopolistic firms' profitability. In its turn, the platform's optimal effort depends on exogenous parameters, including the demand's sensitivity to fake reviews.
JEL Classifications: D21, D43, L13, L81
KW - Fake reviews
KW - oligopolistic competition
KW - online platforms
KW - online reputation
UR - http://www.scopus.com/inward/record.url?scp=85118470674&partnerID=8YFLogxK
U2 - 10.1177/23210222211051470
DO - 10.1177/23210222211051470
M3 - Article
SN - 2321-0222
VL - 11
SP - 235
EP - 245
JO - Studies in Microeconomics
JF - Studies in Microeconomics
ER -