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on Marketing |
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Issue of 2024‒07‒29
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. Our results suggest that efforts of major platforms to facilitate ratings may have lead to less-informative ratings, and possibly also shifted surplus from consumers to sellers. |
| Keywords: | Rating and reviews, digital economy, reputation |
| JEL: | D21 D83 L10 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_509v2&r= |
| By: | Agnès Helme-Guizon (CERAG - Centre d'études et de recherches appliquées à la gestion - UGA - Université Grenoble Alpes, UGA INP IAE - Grenoble Institut d'Administration des Entreprises - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, UGA - Université Grenoble Alpes) |
| Abstract: | Background: While the benefits of co-creation are well documented, the potential of online co-creation for marketing and social marketing, in particular, remains underexplored. Focus of the article: In this article, the author addresses the main challenges associated with online co-creation in social marketing. The author provides suggestions based on the literature on online research communities and her own experience. Importance to the social marketing field: Identifying challenges and providing solutions should facilitate the development of online co-creation. Recommendations for Research or Practice: Several recommendations are made to address the challenges raised by online co-creation process in social marketing, including choosing the digital platform, recruiting and initiating participation, crafting the co-creation journey, engaging and facilitating interactive participation, nurturing co-creation online, creating a unique experience, and evaluating the co-creation process. Limitations: The discussion presented here is purely based on the opinions and experiences of the author. |
| Keywords: | Co-Creation, Online Research Communities, Participation, Engagement |
| Date: | 2024–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04615939&r= |