The Superiority of Biased Reviewers in a Model of Simultaneous Sales
AbstractThis paper considers the impact of reviewers on sales of products of quality unknown to consumers. Sales occur simultaneously after consideration by a reviewer with a known level of bias. Consumers observe the reviewer`s decision and a private signal. We find that: (a) with flexible prices and signals that are not too revealing the reviewer most biased against the product is best for profits; (b) with flexible prices and very revealing private signals the reviewer most biased in favour is optimal; (c) with fixed prices then a reviewer biased against, but close to unibased, is optimal.
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Bibliographic InfoPaper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number 206.
Date of creation: 01 Sep 2004
Date of revision:
Private Information; Reviewers; Bias; Simultaneous Sales; Marketing;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
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- Gill, David & Sgroi, Daniel, 2008.
"Sequential decisions with tests,"
Games and Economic Behavior,
Elsevier, vol. 63(2), pages 663-678, July.
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