HETEROGENEOUS EFFECTS OF ONLINE REPUTATION FOR LOCAL AND NATIONAL RETAILERS

Peter Newberry, Xiaolu Zhou

Research output: Contribution to journalArticle

Abstract

We study the heterogeneous effect of online reputation for sellers that differ in their national presence and examine how this heterogeneity affects the distribution of sales on a large Chinese platform. We estimate a demand model that incorporates a learning process and allow for the process to vary across sellers who are differentiated by their national presence. The estimates suggest that the impact of reputation is larger for local sellers. Using these estimates, we find that removing the reputation system would result in large shift of demand from local sellers to national sellers.

Original languageEnglish (US)
Pages (from-to)1565-1587
Number of pages23
JournalInternational Economic Review
Volume60
Issue number4
DOIs
StatePublished - Nov 1 2019

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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