In this area, we focus on the influence of fraudulent customer reviews on the efficiency of instruments that are designed to reduce information asymmetries in electronic markets.
In particular, this means:
- Investigating the influence of opportunistic behavior of OTF market agents on the efficacy of customer reviews as an instrument to reduce information asymmetries.
- Examining two forms of opportunistic behavior: Fraudulent customer reviews and changing the identity of providers with negative customer reviews.
- Designing and evaluating measures to prevent opportunistic behavior in OTF markets.
One approach to address identity changes of providers is to adopt an already developed experimental design. The original purpose was to investigate the sellers’ usage of reputation systems. Part of the design is that sellers can use a positive reputation to increase short-term revenues by selling low-quality products and, as a consequence, receiving negative customer ratings which, in turn, leads to a decrease in the relevant reputation score. Experimental evidence suggests that individuals do in fact exhibit a tendency towards this behavioral pattern. An interesting research question is, therefore, whether the possibility of identity changes increases this kind of behavior, because negative reputation could be changed to a neutral one at low costs. In the second step, after investigating the effect of identity changes on the efficacy of reputation systems, instruments to reduce this impact will be engineered and verified in the lab.