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on Marketing |
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Issue of 2024‒03‒25
two papers chosen by |
| By: | Johannes Johnen; Robin Ng |
| Abstract: | Evidence suggests lower prices lead to better ratings, but better ratings induce firms to charge higher prices in the future. We model that consumers are only willing to make the effort to rate a seller if this seller provides a sufficient value-for-money. Using this model, we explore how firms use prices to impact their own ratings. We show that firms harvest ratings: they offer lower prices in early periods to trigger consumers to leave a good rating in order to earn larger profits in the future. Because especially low-quality firms harvest ratings, harvesting makes ratings less-informative about quality. Based on this mechanism, (i) we argue that rating harvesting causes rating inflation; (ii) we show that a marketplace that facilitates ratings (e.g. through reminders, one-click ratings etc.) may get more ratings, but also less-informative ratings; (iii) a marketplace that screens the quality of sellers makes ratings less-informative if the screening is insufficient. Counter to the conventional wisdom that consumers benefit from ratings via the information they transmit, we show that consumers prefer somewhat, but never fully informative ratings. Nonetheless consumers prefer more-informative ratings than average sellers. We apply these results to characterise when a two-sided platform wants to facilitate ratings, and argue that efforts of major platforms to facilitate ratings did not just lead to less-informative ratings, but also shifted surplus from consumers to sellers. |
| Keywords: | Rating and reviews, digital economy, reputation |
| JEL: | D21 D83 L10 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_509&r=mkt |
| By: | Rahhal El Makkaoui (UM5 - Université Mohammed V de Rabat [Agdal]) |
| Abstract: | In recent years, customer experience has become a primary concern for several multinational corporations, with very senior roles committed to it in their hierarchy. Research on the nature, determinants, and consequences of customer experience is widely presented in the literature and, however, often divergent in many aspects. The advent of the sharing economy where the customer can also be a producer of value and a service provider has made certain concepts of the customer experience very controversial, starting with the notion of the customer itself. This literature review aims to explore to what extent certain notions of customer experience remain valid and could adapt well to this new booming economy. The analysis we conducted covered 104 articles. This literature review has shown the existence of certain determinants of the customer experience and the customer journey that are specific to the collaborative economy and has identified avenues for future research on the measurement, determinants, and quality of customer experience and journey in this new economy. |
| Keywords: | sharing economy customer experience customer journey quality of customer experience, sharing economy, customer experience, customer journey, quality of customer experience |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04450139&r=mkt |