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Choice Manipulation Through Comparability in Markets with Verifiable Multi-Attribute Products

Author

Listed:
  • Debora Di Caprio

    (Department of Mathematics and Statistics, York University, 4700 Keele Street, M3J 1P3, Toronto, Canada)

  • Francisco Javier Santos Arteaga

    (ICEI, Universidad Complutense de Madrid, Campus de Somosaguas, 28223 Madrid, Spain)

  • Madjid Tavana

    (Business Systems and Analytics Department, Lindback Distinguished Chair of Information Systems and Decision Sciences, La Salle University, Philadelphia, PA 19141, USA;
    Business Information Systems Department, Faculty of Business Administration and Economics, University of Paderborn, D-33098 Paderborn, Germany)

Abstract

We illustrate how an information sender may use unverifiable signals regarding a set of substitute products located in an alternative market to manipulate the choices made by uninformed but perfectly rational decision makers (DMs) within theverifiablemarket where the information sender operates. We do so by defining an optimal information gathering structure for rational DMs who acquire information sequentially from a set of multidimensional products. The resulting strategic signaling environment delivers two main results that are illustrated numerically. First, in order for the sender to successfully manipulate the information gathering and choice behavior of DMs, he should release signals on characteristics that differ from their most preferred ones. Second, the capacity of the sender to manipulate the behavior of DMs dependsnegativelyon his reputation regarding the expected value of the unobserved characteristics guaranteed to DMs within the market where he operates. Normative applications to online search environments conditioned by the provision of strategic reviews in social media are presented.

Suggested Citation

  • Debora Di Caprio & Francisco Javier Santos Arteaga & Madjid Tavana, 2015. "Choice Manipulation Through Comparability in Markets with Verifiable Multi-Attribute Products," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 14(02), pages 339-374.
    • Handle: RePEc:wsi:ijitdm:v:14:y:2015:i:02:n:s0219622014500886
    DOI: 10.1142/S0219622014500886
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