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Manipulation Through Biased Product Reviews

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  • Kemal Kıvanç Aköz
  • Cemal Eren Arbatli
  • Levent Celik

Abstract

We study a signal‐jamming model of product review manipulation in which rational consumers consult product reviews and price to better estimate a product's quality, and a firm, whose quality is either high or low, chooses its price and how much bias to insert into product reviews. We show that both firm types always exert positive effort to manipulate product reviews, and, depending on the equilibrium price level, one or both of them can increase its sales. When the high‐type firm exerts more effort than the low‐type, review manipulation benefits consumers by raising [lowering] their demand for the high‐quality [low‐quality] product.

Suggested Citation

  • Kemal Kıvanç Aköz & Cemal Eren Arbatli & Levent Celik, 2020. "Manipulation Through Biased Product Reviews," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 591-639, December.
    • Handle: RePEc:bla:jindec:v:68:y:2020:i:4:p:591-639
    DOI: 10.1111/joie.12240
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    3. Liu, Xingyi, 2022. "Competitive pricing and advertising with spillover," Journal of Mathematical Economics, Elsevier, vol. 101(C).

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