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.
We investigate the sellers’ usage of reputation systems, whereby it is part of the design 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.