The Social Welfare Effect of E-Commerce Product Reputation Information Asymmetry
Author Information
Author(s): Zhao Min, Wang Shuyun, Xia Tongshui
Primary Institution: Business School, Shandong Normal University, Jinan, China
Hypothesis
Can the e-commerce product reputation mechanism effectively increase the total welfare of consumers, merchants, platforms, and society?
Conclusion
Reputation mechanisms can effectively increase consumer surplus and total social welfare, but when reputation information is asymmetric, consumer surplus decreases.
Supporting Evidence
- When reputation information is symmetric, consumer welfare increases.
- Reputation information asymmetry negatively impacts consumer surplus.
- Merchants' surplus decreases with increased penalty costs for violations.
- Platform profits increase with the degree of reputation information asymmetry.
Takeaway
This study shows that when online sellers have fake reviews, it hurts consumers and society, but it can help the sellers make more money.
Methodology
The study uses game theory to construct a theoretical model comparing symmetric and asymmetric reputation information in a duopoly e-commerce platform market.
Potential Biases
The platform may lack motivation to control reputation information asymmetry due to potential profit increases.
Limitations
The study is based on theoretical arguments and lacks empirical data.
Participant Demographics
The study focuses on consumers and merchants in the e-commerce market, particularly in China.
Digital Object Identifier (DOI)
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