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HETEROGENEOUS EFFECTS OF ONLINE REPUTATION FOR LOCAL AND NATIONAL RETAILERS
Author(s) -
Newberry Peter,
Zhou Xiaolu
Publication year - 2019
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/iere.12397
Subject(s) - reputation , process (computing) , distribution (mathematics) , business , microeconomics , marketing , econometrics , advertising , industrial organization , economics , computer science , mathematics , mathematical analysis , operating system , social science , sociology
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.