THESIS
2013
Abstract
In recent years, consumer online review has emerged as important source of marketing information, which has significant impacts on consumer’s information processing and decision making. To our knowledge, few researchers investigated how consumer combines two source of biased information (ie. deceptive advertising and consumer online review) to infer the true quality of product. This paper wants to fill the gap and build up an analytical model to study the impacts of consumer online review on consumer behavior and firm strategy. Specifically, we find several interesting results: first, a monopoly firm discloses different quality claim under the condition with the availability of consumer online review, and online review may benefit the firm in some situations, while hurt the firm in the...[
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In recent years, consumer online review has emerged as important source of marketing information, which has significant impacts on consumer’s information processing and decision making. To our knowledge, few researchers investigated how consumer combines two source of biased information (ie. deceptive advertising and consumer online review) to infer the true quality of product. This paper wants to fill the gap and build up an analytical model to study the impacts of consumer online review on consumer behavior and firm strategy. Specifically, we find several interesting results: first, a monopoly firm discloses different quality claim under the condition with the availability of consumer online review, and online review may benefit the firm in some situations, while hurt the firm in the other situations. Correspondingly, consumer surplus and social welfare will be changed under the condition with online review, which may be improved or depressed. Detailed results can be looked up in the section 4 of this paper, and finally we will also point out some limitations of the model in this paper and discuss future research directions in the last part of the paper.
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