IMPROVING THE COMPETITIVENESS OF ONLINE MARKETS OF CREDENCE GOODS WITH REPUTATION MECHANISMS
EDN: RVTRMN
Abstract
Rapid development of markets for experience and credence goods in XXI century has not yet been analyzed in Russian academical literature. Meanwhile these markets has institutionalized and changed organizational structure and rules of some markets, for instance, private tutors market (internet site www.repetitors.info) and home-rent market (internet site www.airbnb.com). In this article I analyze internet markets in context of assymetric information and adverse selection, comparing them to offline markets. Key thesis is that online markets without reputational mechanisms are less efficient compare to offline markets. I consider list of recent research of reputation on online markets which offer different mechanisms to avoid adverse selection on internet. I compare social interactions of consumers and web 2.0 (user-generated content) instruments. I conclude that online markets should help seller of experience good (or service) to build his reputation through stimulating his consumers to share information in their social accounts. In conclusion I suggest more directions for deeper analysis of these phenomena.
References
1. Akerlof G. The Market for «Lemons»: Quality Uncertainty and the Market Mechanism // The Quarterly Journal of Economics. V. 84. August, 1970. Р. 488-500
2. Aperjis C., Johari R. Optimal Windows for Aggregating Ratings in Electronic Marketplaces // Management Science. Vol. 56. № 5. May, 2010. Р. 864- 880
3. Ba S., Pavlou P. A. Evidence of the effect of trust building technology in electronic markets - price premiums and buyer behavior. MIS Quarterly. Vol. 26. Is. 3. September, 2002. P. 243-268
4. Ba S., Pavlou P. A. Evidence of the Effect of Trust Building Technology in Electronic Markets: Price Premiums and Buyer Behavior // Journal of Marketing. 2002. № 59
5. Banerjee A., Fudenberg D. Word-of-Mouth Learning // Games and Economic Behavior. 2004. № 46. Р. 1-22
6. Biswas A., Biswas A. The diagnostic role of signals in the context of perceived risks in online shopping: do signals matter more on the web // Journal of Interactive Marketing. 2004. № 18 (3). Р. 30-45
7. Bolton G., Katok E., Ockenfels A. How effective are online reputation mechanisms? An experimental investigation // Management Science. Vol. 50. № 11. Nov., 2004
8. Chen J., Xu H., Whinston A. B. Moderated online communities and quality of user-generated content // Journal of Management Information Systems. Fall 2011. Vol. 28. № 2. Р. 237-268
9. Cheryl T. Druehl Strategic Product/Service Innovations of an Online Firm // Decision Sciences. Vol. 41. № 3. August, 2010
10. Daniel Amor. The e-busines revolution. Prentice Hall, New York, 2002
11. David Godes, Dina Mayzlin. The firm`s management of social interactions. 2005. Marketing Letters, 16. 3/4. Р. 415-428
12. Dellarocas C. Reputation Mechanism Design in On- line Trading Environments with Pure Moral // Information Systems Research. June, 2005. Vol. 16. № 2. Р. 209-230
13. Dellarocas C. The digitization of word-of-mouth: promise and challenges of online reputation mechanisms // Management Science. 2003. Vol. 49. № 10. October, 2003. Р. 1407-1424
14. Dellarocas C., Narayan R. A Statistical Measure of a Population's Propensity to Engage in Post-Purchase Online Word-of-Mouth // Statistical Science. Vol. 21. 2006. № 2. Р. 277-285
15. Dellarocas D. Online Reputation System-How to Design One That Does What You Need. MITSloan management review. 2010. Vol. 51. № 3
16. Dewally M., Ederington L. Reputation, certification, warranties, and information as remedies for seller-buyer information asymmetries: Lessons from the online comic book market // Journal of Business. 2006. № 79. Р. 693-730
17. Diamond D. Reputation acquisition in debt markets // Journal of Political economy. 1989. Vol. 97. № 4
18. Dimoka А., Yili Hong, Pavlou Р. А. On product uncertainty in online markets. MIS Quarterly. Vol. 36. 2012
19. Edward J. Deak. The economics of e-commerce and the internet. Thomson, South-Western, Mar 1, 2003. Business & Economics. - 428 p
20. Gaur V., Sharma N. K. A Dynamic Framework of Reputation Systems for an Agent Mediated e-market // IJCSI International Journal of Computer Science Issues. Vol. 8. Is. 4. July 2011
21. Ghose A. Internet Exchanges for Used Goods: An Empirical Analysis of Trade Patterns and Adverse Selection. MIS Quarterly. Vol. 33. Is. 2. June, 2009. P. 263-292
22. Güth W., Mengel F., Ockenfels A. An Evolutionary Analysis of Buyer Insurance and Seller Reputation in Online Markets // Theory and Decision. 2007. Vol. 63. Р. 265-282
23. Hu N., Pavlou P., Zhang J. Why do Online Product Reviews have a J-shaped Distribution? Overcoming Biases in Online Word-of-Mouth Communication // Working Paper. 2007
24. Huston J. H., Spencer R. W. Quality, Uncertainty and the Internet: The Market for Cyber Lemons // The American Economist. Vol. 46. № 1 (Spring, 2002). Р. 50-60
25. Jiang Z., Wang W., Benbasat I. Multimedia-Based Interactive Advising Technology for Online Consumer Decision Support // Communications of the ACM. Vol. 48. 2005. № 8. Р. 92-98
26. Jiangxia Hu. Business Models of Information Aggregators. MIT working papers, 2007
27. Klein T. J., Lambertz C., Spagnolo G., Stahl K. O. Last minute feedback // CEPR Discussion Paper. June, 2006. № 5693
28. Koch J. V., Cebula R. J. Price, quality, and service on the internet: Sense and nonsense // Building Research & Information. Vol. 33. Is. 2. 2002
29. Lee H. G. Do Electronic Marketplaces Lower the Price of Goods? // Communications of the ACM. Vol. 41. Is. 1. Jan., 1998. P. 73-80
30. Lewis Gregory. Asymmetric Information, Adverse Selection and Online Disclosure: The Case of eBay Motors // American Economic Review. 2011. № 101 (4). Р. 1535-46
31. Li X., Hitt L. M. Self Selection and Information Role of Online Product Reviews // Information Systems Research. December. Vol. 19. 2008. № 4. Р. 456-474
32. Liebeskind J., Rumelt R. P. Markets for Experience Goods with Performance Uncertainty // The RAND Journal of Economics. Vol. 20. № 4. Winter, 1989. Р. 601-621
33. Melnik M. I., Alm J. Does a seller's ecommerce reputation matter? Evidence from eBay auctions // The Journal of Industrial Economics. Vol. 50. Is. 3. September, 2002. Р. 337-349
34. Pavlou P. A., Dimoka A. The Nature and Role of Feedback Text Comments in Online Marketplaces: Implications for Trust Building, Price Premiums, and Seller Differentiation // Information Systems Research. December. Vol. 17. 2006. № 4. Р. 392-414
35. Pavlou P. A., Gefen D. Building Effective Online Marketplaces with Institution-Based Trust // Information Systems Research. 2004. № 15. Р. 37-59
36. Qingmin Liu. Information Acquisition and Reputation Dynamics // Review of Economic Studies. 2011. №78 (4). Р. 1400-1425
37. Resnick P., Zeckhauser R. Trust among strangers in internet transactions: empirical analysis of ebay's reputation system // The Economics of the Internet and E-Commerce. Michael R. Baye, editor. Vol. 11 of Advances in Applied Microeconomics. Amsterdam: Elsevier Science, 2002. Р. 127-157
38. Salop Steven. The noisy monopolist: imperfect information, price dispertion and price discrimination // The Review of Economic Studies. Vol. 44. № 3. Oct., 1977. Р. 393-406
39. Sarkar Mitrabarun, Brian Butler, Charles Steinfield. Cybermediaries in Electronic Marketspace: Toward Theory Building // Journal of Business Research. Vol. 41. № 3. March, 1998. Р. 215-221
40. Spence M. Job Market Signaling // The Quarterly Journal of Economics. Vol. 87. August, 1973. Р. 355-374
41. Thanasis G. Papaioannou, George D. Stamoulis. A mechanism that provides incentives for truthful feedback in peer-to-peer systems // Electronic Commerce. 2010. № 10. Р. 331-362
42. Thomas Lützkendorf, Thorsten M. Speer. Alleviating asymmetric information in propertymarkets: building performance and product quality as signals for consumers // Building Research and Information. Vol. 33. № 2. March - April, 2005. Р. 182-195
43. Winch G., Joyce P. Exploring the dynamics of building, and losing, consumer trust in B2C e-business // International Journal of Retail & Distribution Management. Vol. 34. Is. 7. 2006. Р. 541-555
44. Xiao B., Benbasat I. Ecommerce Product Recommendation Agents: Use, Characteristics, and Impact // MIS Quarterly. Vol. 31. March, 2007. № 1. Р. 137-209
45. Yannis Bakos J. A Strategic Analysis of Electronic Marketplaces. MIS Quarterly. Vol. 15. № 3. Special Issue: [Strategic Use of Information Systems] Sep., 1991. Р. 295-310
46. Yo-Sub Han Laehyun Kim. Computing user reputation in a social network of web 2.0 // Computing and Informatics. Vol. 31. 2012. Р. 447-462
47. Yubo Сhen, Qi Wang, Jinhong Xie. Online social interactions - a natural experiment on word of mouth versus observational learning // Journal of Marketing Research, Vol. XLVIII. April, 2011. Р. 238-254
48. Балакина Т. П. Экономика репетиторства: мотивы, стимулы, модели // Финансы и бизнес. 2011. № 1. C. 23-37
49. Долгин А. Манифест новой экономики. Вторая невидимая рука рынка. М.: АСТ, 2010
50. Исследование «Экономика Рунета 2011-2012». М.: НИУ ВШЭ, РАЭК. - 52 с
51. Каверзин И. Л., Махров П. Н. Факторы конкурентоспособности и инвестиционной привлекательности интернет-проектов // Современная конкуренция. 2012. № 5 (35). С. 44-53
52. Коваленко А. И. О конкуренции теорий конкуренций // Современная конкуренция. 2010. № 6 (24). С. 107-116
53. Розанова Н. М. Микроэкономика - руководство для будущих профессионалов. М.: Юрайт, 2012
Review
For citations:
Saperov N. IMPROVING THE COMPETITIVENESS OF ONLINE MARKETS OF CREDENCE GOODS WITH REPUTATION MECHANISMS. Journal of Modern Competition. 2013;(5):44-64. EDN: RVTRMN
Email this article 