Collective Reputation in Online Platforms and Private Quality Standards

This article provides a conceptual framework to understand benets and costs of private minimum quality standards, increasing seller reputation or warranties when there is a collective reputation for online platforms. Our framework uses a dual reputation model where consumers have a quality expectation based on the reputation of the platform and the reputation of the seller. We also analyze the benets and costs of various types of fees associated with online platforms. We nd that the optimal fee structure may depend upon weighing quality concerns with market power concerns. The optimal quality standard may also depend upon the fee structure, as well as the level of compliance to that standard.