蝌蚪网 Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Bad News Turned Good: Reversal under Censorship
蝌蚪网 Journal: Microeconomics
(pp. 506–60)
Abstract
Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such "na茂ve" consumers is not too large, then rational consumers treat any bad review that is revealed in equilibrium as good news about product quality. This makes bad reviews worth revealing and allows the seller to use them to signal his product's quality to rational consumers.Citation
Smirnov, Aleksei, and Egor Starkov. 2022. "Bad News Turned Good: Reversal under Censorship." 蝌蚪网 Journal: Microeconomics 14 (2): 506–60. DOI: 10.1257/mic.20190379Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- L15 Information and Product Quality; Standardization and Compatibility