Virtual Quant Marketing Seminar - Yanyou Chen
Platform-Generated Quality Ratings: Theory, Empirics and Welfare Implications
Dear All,
Our next Virtual Quant Marketing Seminar is on Monday, March 25 at Noon ET. The speaker will be Yanyou Chen.
The zoom link is below, note that this is a new link.
https://hbs.zoom.us/j/93651241772?pwd=N2dTTC9RZHdoTjhXUjdPOXpkRkNDdz09
Title: Platform-Generated Quality Ratings: Theory, Empirics and Welfare Implications (joint with Jie Bai, Daniel Xu, and Zhe Yuan)
Abstract:
In order to address the issue of asymmetric information and promote market regulation, digital platforms have implemented platform-generated rating (PGR) systems to provide quality information to the market. Unlike user-generated rating (UGR) systems, PGRs rely on platform-generated data including product quality, customer service, and logistics. To better understand the impact of PGRs, we conducted a study in collaboration with a large E-commerce platform, exploring both empirical and theoretical implications on consumer beliefs, sellers' quality incentives, and market outcomes. Our empirical analysis utilized a regression-discontinuity method to examine customer response to high PGR sellers. Results indicate that customers tend to purchase more from high PGR sellers, suggesting that PGRs can be effective in signaling quality to consumers. We also found that the presence of a PGR system affects sellers' quality incentives and the distribution of equilibrium quality. These findings demonstrate that PGRs have the potential to promote quality competition among sellers in the market. Finally, we conducted a counterfactual experiment to evaluate the welfare consequences of PGR adoption. Our (tentative) results suggest that PGR adoption can have a positive impact on overall welfare. Overall, our study highlights the potential benefits of PGRs in promoting market efficiency and enhancing consumer welfare.
The schedule for the rest of the semester is:
Monday, April 1, Noon ET - Jessica Fong (University of Michigan)
Monday, April 8, Noon ET - Ali Goli (University of Washington)
Monday, May 6, Noon ET - Sam Goldberg (Stanford)
We encourage you to use our google calendar to keep track of the talks.