The End of Tourist Traps: The Impact of Review Platforms on Quality Upgrading

Published Online:https://doi.org/10.1287/mksc.2023.0482

References

  • Akerlof GA (1970) The market for “lemons”: Quality uncertainty and the market mechanism. Quart. J. Econom. 84(3):488–500.CrossrefGoogle Scholar
  • Allen T (2014) Information frictions in trade. Econometrica 82(6):2041–2083.CrossrefGoogle Scholar
  • Alyakoob M, Rahman MS (2022) Shared prosperity (or lack thereof) in the sharing economy. Inform. Systems Res. 33(2):638–658.LinkGoogle Scholar
  • Ananthakrishnan U, Proserpio D, Sharma S (2023) I hear you: Does quality improve with customer voice? Marketing Sci. 42(6):1143–1161.LinkGoogle Scholar
  • Anderson M, Magruder J (2012) Learning from the crowd: Regression discontinuity estimates of the effects of an online review database. Econom. J. 122(563):957–989.Google Scholar
  • Anderson SP, Renault R (1999) Pricing, product diversity, and search costs: A Bertrand-Chamberlin-Diamond model. RAND J. Econom. 30(4):719–735.CrossrefGoogle Scholar
  • Anderson SJ, Chandy R, Zia B (2018) Pathways to profits: The impact of marketing vs. finance skills on business performance. Management Sci. 64(12):5559–5583.LinkGoogle Scholar
  • Andreyeva T, Long MW, Brownell KD (2010) The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food. Amer. J. Public Health 100(2):216–222.CrossrefGoogle Scholar
  • Bai J (2025) Melons as lemons: Asymmetric information, consumer learning and seller reputation. Rev. Econom. Stud., ePub ahead of print January 28, https://doi.org/10.1093/restud/rdaf006.CrossrefGoogle Scholar
  • Barahona N, Otero C, Otero S (2023) Equilibrium effects of food labeling policies. Econometrica 91(3):839–868.CrossrefGoogle Scholar
  • Bar-Isaac H, Caruana G, Cuñat V (2012) Search, design, and market structure. Amer. Econom. Rev. 102(2):1140–1160.CrossrefGoogle Scholar
  • Basu S, Fernald JG (1997) Returns to scale in US production: Estimates and implications. J. Polit. Econom. 105(2):249–283.CrossrefGoogle Scholar
  • Brambilla I, Lederman D, Porto G (2012) Exports, export destinations, and skills. Amer. Econom. Rev. 102(7):3406–3438.CrossrefGoogle Scholar
  • Brynjolfsson E, Hu Y, Smith MD (2010) Research commentary—Long tails vs. superstars: The effect of information technology on product variety and sales concentration patterns. Inform. Systems Res. 21(4):736–747.LinkGoogle Scholar
  • Cabral L, Hortaçsu A (2010) The dynamics of seller reputation: Evidence from eBay. J. Indust. Econom. 58(1):54–78.CrossrefGoogle Scholar
  • Chan Y-S, Leland H (1982) Prices and qualities in markets with costly information. Rev. Econom. Stud. 49(4):499–516.CrossrefGoogle Scholar
  • Chen Y, Xie J (2005) Third-party product review and firm marketing strategy. Marketing Sci. 24(2):218–240.LinkGoogle Scholar
  • Chen Y, Xie J (2008) Online consumer review: Word-of-mouth as a new element of marketing communication mix. Management Sci. 54(3):477–491.LinkGoogle Scholar
  • Chevalier JA, Mayzlin D (2006) The effect of word of mouth on sales: Online book reviews. J. Marketing Res. 43(3):345–354.CrossrefGoogle Scholar
  • Chevalier JA, Dover Y, Mayzlin D (2018) Channels of impact: User reviews when quality is dynamic and managers respond. Marketing Sci. 37(5):688–709.LinkGoogle Scholar
  • Cooper R, Ross TW (1984) Prices, product qualities and asymmetric information: The competitive case. Rev. Econom. Stud. 51(2):197–207.CrossrefGoogle Scholar
  • Dai W, Luca M (2020) Digitizing disclosure: The case of restaurant hygiene scores. Amer. Econom. J. Microeconom. 12(2):41–59.CrossrefGoogle Scholar
  • Dall’orso J, Gauriot R, Page L (2016) Disappointment looms around the corner: Visibility and local businesses’ market power, Technical report, QUT Business School, Brisbane, Australia.Google Scholar
  • Elfenbein DW, Fisman R, McManus B (2015) Market structure, reputation, and the value of quality certification. Amer. Econom. J. Microeconom. 7(4):83–108.CrossrefGoogle Scholar
  • Eliashberg J, Shugan SM (1997) Film critics: Influencers or predictors? J. Marketing 61(2):68–78.CrossrefGoogle Scholar
  • Ershov D (2024) Variety-based congestion in online markets: evidence from mobile apps. Amer. Econom. J. Microeconom. 16(2):180–203.Google Scholar
  • Fang L (2022) The effects of online review platforms on restaurant revenue, consumer learning, and welfare. Management Sci. 68(11):8116–8143.LinkGoogle Scholar
  • Farronato C, Zervas G (2022) Consumer reviews and regulation: Evidence from NYC restaurants. NBER Working Paper No. 29715, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Fishman A, Levy N (2015) Search costs and investment in quality. J. Indust. Econom. 63(4):625–641.CrossrefGoogle Scholar
  • Gerber AS, Green DP (2012) Field Experiments: Design, Analysis, and Interpretation (WW Norton, New York).Google Scholar
  • Ghose A, Goldfarb A, Han SP (2013) How is the mobile internet different? Search costs and local activities. Inform. Systems Res. 24(3):613–631.LinkGoogle Scholar
  • Godes D (2017) Product policy in markets with word-of-mouth communication. Management Sci. 63(1):267–278.LinkGoogle Scholar
  • Goldfarb A, Tucker C (2019) Digital economics. J. Econom. Lit. 57(1):3–43.CrossrefGoogle Scholar
  • Goldmanis M, Hortaçsu A, Syverson C, Emre Ö (2010) E-commerce and the market structure of retail industries. Econom. J. 120(545):651–682.Google Scholar
  • Grzybowski L, Muñoz A (2023) Impact of roaming regulation on revenues and prices of mobile operators in the EU. Internat. J. Indust. Organ. 89:102927Google Scholar
  • Hansman C, Hjort J, León-Ciliotta G, Teachout M (2020) Vertical integration, supplier behavior, and quality upgrading among exporters. J. Political Econom. 128(9):3570–3625.CrossrefGoogle Scholar
  • He S, Hollenbeck B, Proserpio D (2022) The market for fake reviews. Marketing Sci. 41(5):896–921.LinkGoogle Scholar
  • Hjort J, Iyer V, De Rochambeau G (2020) Informational barriers to market access: Experimental evidence from Liberian firms. NBER Working Paper No. 27662, National Bureau of Economic Research, Cambridge, MA.Google Scholar
  • Hollenbeck B (2018) Online reputation mechanisms and the decreasing value of chain affiliation. J. Marketing Res. 55(5):636–654.CrossrefGoogle Scholar
  • Hollenbeck B, Moorthy S, Proserpio D (2019) Advertising strategy in the presence of reviews: An empirical analysis. Marketing Sci. 38(5):793–811.LinkGoogle Scholar
  • Hopenhayn HA (1992) Entry, exit, and firm dynamics in long run equilibrium. Econometrica 60(5):1127–1150.CrossrefGoogle Scholar
  • Hui X, Saeedi M, Sundaresan N (2018) Adverse selection or moral hazard, an empirical study. J. Indust. Econom. 66(3):610–649.CrossrefGoogle Scholar
  • Hui X, Saeedi M, Spagnolo G, Tadelis S (2023) Raising the bar: Certification thresholds and market outcomes. Amer. Econom. J. Microeconom. 15(2):599–626.CrossrefGoogle Scholar
  • Hunter M (2022) Chasing stars: Firms’ strategic responses to online consumer ratings. Proc. 23rd ACM Conf. Econom. Comput. (Association for Computing Machinery, New York), 298–299.Google Scholar
  • Jensen R (2007) The digital provide: Information (technology), market performance, and welfare in the South Indian fisheries sector. Quart. J. Econom. 122(3):879–924.CrossrefGoogle Scholar
  • Jensen R, Miller NH (2018) Market integration, demand, and the growth of firms: Evidence from a natural experiment in India. Amer. Econom. Rev. 108(12):3583–3625.CrossrefGoogle Scholar
  • Jin GZ, Leslie P (2003) The effect of information on product quality: Evidence from restaurant hygiene grade cards. Quart. J. Econom. 118(2):409–451.CrossrefGoogle Scholar
  • Jin GZ, Leslie P (2009) Reputational incentives for restaurant hygiene. Amer. Econom. J. Microeconom. 1(1):237–267.CrossrefGoogle Scholar
  • Klein LR (1998) Evaluating the potential of interactive media through a new lens: Search versus experience goods. J. Bus. Res. 41(3):195–203.CrossrefGoogle Scholar
  • Klein TJ, Lambertz C, Stahl KO (2016) Market transparency, adverse selection, and moral hazard. J. Polit. Econom. 124(6):1677–1713.CrossrefGoogle Scholar
  • Kugler M, Verhoogen E (2012) Prices, plant size, and product quality. Rev. Econom. Stud. 79(1):307–339.CrossrefGoogle Scholar
  • Leland HE (1979) Quacks, lemons, and licensing: A theory of minimum quality standards. J. Polit. Econom. 87(6):1328–1346.CrossrefGoogle Scholar
  • Lewis G, Zervas G (2019) The supply and demand effects of review platforms. Preprint, submitted October 23, https://dx.doi.org/10.2139/ssrn.3468278.Google Scholar
  • Liu M, Brynjolfsson E, Dowlatabadi J (2021) Do digital platforms reduce moral hazard? The case of Uber and taxis. Management Sci. 67(8):4665–4685.LinkGoogle Scholar
  • Luca M (2016) ‘Reviews, reputation, and revenue: The case of Yelp.com. Harvard Business School NOM Unit Working Paper 12-016, Harvard Business School, Boston.Google Scholar
  • McCall JJ (1970) Economics of information and job search. Quart. J. Econom. 84(1):113–126.CrossrefGoogle Scholar
  • Melitz MJ (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica 71(6):1695–1725.CrossrefGoogle Scholar
  • Melnik MI, Alm J (2002) Does a seller’s ecommerce reputation matter? J. Indust. Econom. 50(3):337–349.CrossrefGoogle Scholar
  • Nelson P (1970) Information and consumer behavior. J. Politi. Econom. 78(2):311–329.CrossrefGoogle Scholar
  • Okrent A, Alston J (2012) The demand for disaggregated food-away-from-home and food-at-home products in the United States. USDA-ERS Economic Research Report 139, Economic Research Service, Washington, DC.Google Scholar
  • Proserpio D, Zervas G (2017) Online reputation management: Estimating the impact of management responses on consumer reviews. Marketing Sci. 36(5):645–665.LinkGoogle Scholar
  • Quinn M, Godinho de Matos M, Peukert C (2024) The economic effects of mobile internet access— Evidence from roam-like-at-home. Econom. J. 134(659):1228–1246.Google Scholar
  • Reimers I, Waldfogel J (2021) Digitization and pre-purchase information: The causal and welfare impacts of reviews and crowd ratings. Amer. Econom. Rev. 111(6):1944–1971.CrossrefGoogle Scholar
  • Resnick P, Zeckhauser R, Swanson J, Lockwood K (2006) The value of reputation on eBay: A controlled experiment. Experiment. Econom. 9(2):79–101.CrossrefGoogle Scholar
  • Riordan MH (1986) Monopolistic competition with experience goods. Quart. J. Econom. 101(2):265–279.CrossrefGoogle Scholar
  • Shin M, Shin J, Ghili S, Kim J (2023) The impact of the gig economy on product quality through the labor market: Evidence from ridesharing and restaurant quality. Management Sci. 69(5):2620–2638.LinkGoogle Scholar
  • Syverson C (2004) Market structure and productivity: A concrete example. J. Polit. Econom. 112(6):1181–1222.CrossrefGoogle Scholar
  • Tadelis S (2016) Reputation and feedback systems in online platform markets. Annu. Rev. Econom. 8:321–340.CrossrefGoogle Scholar
  • Vatter B (2021) Quality disclosure and regulation: Scoring design in Medicare Advantage. Preprint, submitted January 11, https://dx.doi.org/10.2139/ssrn.4250361.Google Scholar
  • Verhoogen EA (2008) Trade, quality upgrading, and wage inequality in the Mexican manufacturing sector. Quart. J. Econom. 123(2):489–530.CrossrefGoogle Scholar
  • Wang Y, Chaudhry A (2018) When and how managers’ responses to online reviews affect subsequent reviews. J. Marketing Res. 55(2):163–177.CrossrefGoogle Scholar
  • Yoganarasimhan H (2013) The value of reputation in an online freelance marketplace. Marketing Sci. 32(6):860–891.LinkGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.