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Heterogeneous Effects Of Online Reputation For Local And National Retailers

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  • Peter Newberry
  • Xiaolu Zhou

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.

Suggested Citation

  • Peter Newberry & Xiaolu Zhou, 2019. "Heterogeneous Effects Of Online Reputation For Local And National Retailers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(4), pages 1565-1587, November.
    • Handle: RePEc:wly:iecrev:v:60:y:2019:i:4:p:1565-1587
    DOI: 10.1111/iere.12397
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    Cited by:

    1. Limin Fang, 2022. "The Effects of Online Review Platforms on Restaurant Revenue, Consumer Learning, and Welfare," Management Science, INFORMS, vol. 68(11), pages 8116-8143, November.

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