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The Superiority of Biased Reviewers in a Model of Simultaneous Sales

Author

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  • David Gill
  • Daniel Sgroi

Abstract

This 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.

Suggested Citation

  • David Gill & Daniel Sgroi, 2004. "The Superiority of Biased Reviewers in a Model of Simultaneous Sales," Economics Series Working Papers 206, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:206
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    File URL: http://www.economics.ox.ac.uk/materials/working_papers/paper206.pdf
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    References listed on IDEAS

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    Cited by:

    1. John C. Bluedorn, 2005. "Hurricanes: Intertemporal Trade and Capital Shocks," Economics Papers 2005-W22, Economics Group, Nuffield College, University of Oxford.
    2. Gill, David & Sgroi, Daniel, 2008. "Sequential decisions with tests," Games and Economic Behavior, Elsevier, vol. 63(2), pages 663-678, July.

    More about this item

    Keywords

    Private Information; Reviewers; Bias; Simultaneous Sales; Marketing;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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