IDEAS home Printed from https://ideas.repec.org/a/inm/ormksc/v43y2024i2p317-345.html
   My bibliography  Save this article

Platform Manipulation in Online Retail Marketplace with Sponsored Advertising

Author

Listed:
  • Fei Long

    (Kenan–Flagler Business School, University of North Carolina at Chapel Hill, Chapel Hill, North Carolina 27599)

  • Yunchuan Liu

    (Department of Business Administration, Gies College of Business, University of Illinois Urbana–Champaign, Champaign, Illinois 61820)

Abstract

In this paper, we study an online retail marketplace’s incentive to manipulate sellers’ product attractiveness to consumers (e.g., through fake sales, fake reviews, or dishonest endorsement), as well as sellers’ placement ranking. We design a model of an online retail marketplace with a platform that manipulates sellers’ product attractiveness and sellers’ organic ranking order, and the sellers decide product prices and bid for sponsored advertising space on the platform. We find that the platform may manipulate an inferior seller’s product to appear more attractive to intensify sellers’ competition to bid for advertising and also manipulate a superior seller’s organic placement to either compensate or penalize the superior seller. We show that public policies, such as banning fake sales and fake reviews only by third-party sellers, may not necessarily eradicate manipulation on the platform if they ignore the platform’s incentive for manipulation in the first place.

Suggested Citation

  • Fei Long & Yunchuan Liu, 2024. "Platform Manipulation in Online Retail Marketplace with Sponsored Advertising," Marketing Science, INFORMS, vol. 43(2), pages 317-345, March.
    • Handle: RePEc:inm:ormksc:v:43:y:2024:i:2:p:317-345
    DOI: 10.1287/mksc.2023.1446
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mksc.2023.1446
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mksc.2023.1446?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:43:y:2024:i:2:p:317-345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.