nep-mkt New Economics Papers
on Marketing
Issue of 2021‒02‒08
three papers chosen by
Marco Novarese
Università del Piemonte Orientale

  1. The Market for Fake Reviews By He, Sherry; Hollenbeck, Brett; Proserpio, Davide
  2. How to Measure Product Differentiation By Franz Hackl; Michael Hölzl-Leitner; Dieter Pennerstorfer
  3. The Impact of Digital Marketing on Sausage Manufacturing Companies in the Altos of Jalisco By Guillermo Jose Navarro del Toro

  1. By: He, Sherry; Hollenbeck, Brett; Proserpio, Davide
    Abstract: We study the market for fake product reviews on These reviews are purchased in large private internet groups on Facebook and other sites. We hand-collect data on these markets to characterize the types of products that buy fake reviews and then collect large amounts of data on the ratings and reviews posted on Amazon for these products, as well as their sales rank, advertising, and pricing behavior. We use this data to assess the costs and benefits of fake reviews to sellers and evaluate the degree to which they harm consumers. The theoretical literature on review fraud shows that there exist conditions when they harm consumers and other conditions where they function as simply another type of advertising. Using detailed data on product outcomes before and after they buy fake reviews we can directly determine if these are low-quality products using fake reviews to deceive and harm consumers or if they are possibly high-quality products who solicit reviews to establish reputations. We find that a wide array of products purchase fake reviews including products with many reviews and high average ratings. Soliciting fake reviews on Facebook leads to a significant increase in average rating and sales rank, but the effect disappears after roughly one month. After firms stop buying fake reviews their average ratings fall significantly and the share of one-star reviews increases significantly, indicating fake reviews are mostly used by low quality products and are deceiving and harming consumers. We also observe that Amazon deletes large numbers of reviews and we document their deletion policy.
    Keywords: Online platforms, consumer protection, e-commerce, word-of-mouth
    JEL: K42 L15 L51 L81 M21 M31
    Date: 2021–01–21
  2. By: Franz Hackl; Michael Hölzl-Leitner; Dieter Pennerstorfer
    Abstract: In this article, we provide a novel measure of product differentiation by observing consumer search behavior directly. We track individual consumers in a price search engine and generate a measure of distance in product space, based on goods surveyed conjointly within individual search episodes. This metric performs well in an application to digital cameras as an example of complex products. Regression results show that differences in product characteristics are correlated with our measure of distance to a surprisingly high degree, and that prices are significantly lower if products have to compete with a larger number of close substitutes.
    Keywords: product differentiation, characteristic space, consumer search, price search engine, clickstream.
    JEL: D83 D43 L13 L63
    Date: 2021–01
  3. By: Guillermo Jose Navarro del Toro
    Abstract: One of the goals of any business, in addition to producing high-quality, community-accepted products, is to significantly increase sales. Unfortunately, there are regions where new marketing technologies that make it possible to reach a larger number of potential consumers, not only at the regional level, but also at the state and national level, are not yet used. This research, which included qualitative and quantitative methods, as well as interviews applied to owners, employees and clients of three sausage companies, seeks to measure the impact of digital marketing in the Altos of Jalisco, Mexico. Thus, in addition to inquiring about the degree of knowledge they have regarding information and communication technologies (ICT) to expand their markets to areas with higher population density, another goal is to know the opinion about their manufactured products, their quality and acceptance. It should not be forgotten that companies are moving to an increasingly connected world, which enables entrepreneurs to get their products to a greater number of consumers through the Internet and smart devices, such as cell phones, tablets and computers; and thus ensure the survival of the company and a longer stay in the market.
    Date: 2021–01

This nep-mkt issue is ©2021 by Marco Novarese. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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