Control Mechanisms for Assessing the Quality of Handmade and Artistic Products in e-Marketplace Platforms

Selling handmade and artistic goods online is challenging since buyers need to be able to assess product quality before purchase. This study aims to explore how control mechanisms aid the assessment of the product quality of handmade and artistic goods. We do so by extracting control mechanisms for e-marketplace platforms from existing literature and discussing to what extent these are suitable for handmade and artistic goods. We found that existing literature mainly focuses on reputation systems. We reshaped the findings by conducting desk research to identify how control mechanisms are applied in a number of e-marketplaces. Our results show that in e-marketplaces that focus on selling handmade artistic products, a reputation system is not sufficient to ensure product quality in an online environment. Thus, it is critical to apply other control mechanisms which are more effective in increasing the trustworthiness of the seller of artistic and handmade goods. Last, we also suggest alternative control mechanisms to be explored in future research

Econometric Analysis of Pricing and Operational Strategies

This dissertation contains three essays. The first essay, entitled Pricing and Production Flexibility: An Empirical Analysis of the U.S. Automotive Industry, uses a detailed dataset of the U.S. auto industry to examine the relationship between production flexibility and responsive pricing. Our analysis shows that deploying production flexibility is associated with a reduction in observed discounts and with an increase in plant utilization. Our results allow quantifying some of the benefits of production flexibility. The second essay, entitled An Empirical Analysis of Reputation in Online Service Marketplaces, uses a detailed dataset from a leading online intermediary for software development services to empirically examine the role of reputation on choices and prices in service marketplaces. We find that buyers trade off reputation and price and are willing to accept higher bids posted by more reputable bidders. Sellers primarily use a superior reputation to increase their probability of being selected, as opposed to increasing their prices. Our analysis shows that the numerical reputation score has a smaller effect in situations where there exists a previous relationship between buyer and seller, when the seller has certified his or her skills, when the seller is local, or in situations that prompt higher interpersonal trust. The third essay, entitled The Effects of Product Line Breadth: Evidence from the Automotive Industry, studies the effects of product line breadth on market shares and costs, using data from the U.S. automotive industry. Our results show a positive association between product line breadth and market share and production costs. Beyond the effects on production costs, we study the effect of product line breadth on mismatch costs, which arise from demand uncertainty, and we find that product line breadth has a substantial impact on average discounts and inventories. Our results also show that platform strategies can reduce production costs and that a broader product line can provide a hedge against changes in demand conditions

Online reviews and consumers\u27 willingness to pay: the role of uncertainty

Empirical studies of online reviews have found that valence (average rating) has a consistently positive impact on consumers’ willingness to pay (WTP), but volume does not. Although two studies tried to explain this phenomenon using different perspectives (Wu and Ayala, 2012; Sun, 2012), neither study can fully accommodate the consumer behaviors observed by the other. This dissertation adopts a theoretical framework that can explain the consumer behaviors observed in both studies as well as the varying influence of review volume at the individual level. Specifically, several studies were conducted to investigate the relationship between bidirectional online seller reviews (e.g., the eBay review format) and consumers’ WTP. Essay 1 provides an extensive review of studies that investigate online consumer reviews at the market, product, firm, consumer, and message level; special attention is given to the outcomes of consumer reviews for both products and sellers. In addition, this essay establishes the importance of the current research topic. Essay 2 combines economic and behavioral theories of decision-making under uncertainty to develop a theoretical framework. The framework proposes that review volume and valence influence a consumer’s WTP through a weighting function of outcome probability. Consumers with different preferences towards uncertainty will have different preferences toward review volume, and for some consumers, such preference can change depending on the review valence. Based on this conceptualization, the framework reconciles the current literature by explaining the inconsistent influence of review volume both across and within individuals. The internal validity of the framework is tested with an experiment and analyses carried out at the individual level provide strong support for the proposed conceptual model. Essay 3 establishes the relevance of this research for managers by applying the framework to real market data. Due to the nature of the transactional data, a finite mixture model is used to estimate the weighting function, and hypotheses are tested at the group instead of the individual level. A simulation study demonstrates the validity of using a finite mixture model to estimate the weighting function and classify groups. The results of the hypotheses testing provide adequate support for the framework

Three Essays on Trust Mining in Online Social Networks

This dissertation research consists of three essays on studying trust in online social networks. Trust plays a critical role in online social relationships, because of the high levels of risk and uncertainty involved. Guided by relevant social science and computational graph theories, I develop conceptual and predictive models to gain insights into trusting behaviors in online social relationships. In the first essay, I propose a conceptual model of trust formation in online social networks. This is the first study that integrates the existing graph-based view of trust formation in social networks with socio-psychological theories of trust to provide a richer understanding of trusting behaviors in online social networks. I introduce new behavioral antecedents of trusting behaviors and redefine and integrate existing graph-based concepts to develop the proposed conceptual model. The empirical findings indicate that both socio-psychological and graph-based trust-related factors should be considered in studying trust formation in online social networks. In the second essay, I propose a theory-based predictive model to predict trust and distrust links in online social networks. Previous trust prediction models used limited network structural data to predict future trust/distrust relationships, ignoring the underlying behavioral trust-inducing factors. I identify a comprehensive set of behavioral and structural predictors of trust/distrust links based on related theories, and then build multiple supervised classification models to predict trust/distrust links in online social networks. The empirical results confirm the superior fit and predictive performance of the proposed model over the baselines. In the third essay, I propose a lexicon-based text mining model to mine trust related user-generated content (UGC). This is the first theory-based text mining model to examine important factors in online trusting decisions from UGC. I build domain-specific trustworthiness lexicons for online social networks based on related behavioral foundations and text mining techniques. Next, I propose a lexicon-based text mining model that automatically extracts and classifies trustworthiness characteristics from trust reviews. The empirical evaluations show the superior performance of the proposed text mining system over the baselines

Customer evaluation of managers\u27 responses to online complaints

Managers have begun to respond to customers\u27 online reviews of services on online review websites. However, it is not known how viewers evaluate company-initiated service recovery in the form of manager responses to online reviews. This research has three objectives: (1) to explore how managers are currently responding to electronic word of mouth; (2) to investigate whether a manager\u27s response to electronic negative word of mouth (eNWOM) positively influences viewers\u27 behavioral intentions; (3) to examine which elements in a manager\u27s responses increases viewers\u27 evaluations of trust and behavioral intentions towards the company. Three studies were conducted, one for each objective. Study 1 examined 21,211 online reviews and manager responses from Tripadvisor.com from 184 hotels in five cities. Study 2 was a single-factor between-subject experimental design by manipulating a manager\u27s response to eNWOM (response message vs. no response message) through scenarios. Study 3 was a 2 (procedural justice: high vs. low) x 2 (interactional justice: high vs. low) x 2 (social presence: high vs. low) between-subject experimental design that manipulated manager\u27s responses through scenarios. Findings from Study 1 revealed that managers were more likely to respond to eNWOM compared to neutral word of mouth. A content analysis of 432 company responses to eNWOM determined that managers used nine online review management strategies: appreciation, apology, future patronage encouragement, explanation, follow up, flexibility, correction, compensation, and social presence. Results from Study 2 indicated that viewers were more likely to visit a restaurant when a manager responded to eNWOM compared to no response to eNWOM. Results from Study 3 revealed a three-way interaction of procedural justice, interactional justice, and social presence on trust. There were also main effects of procedural justice and interactional justice on trust. Additionally, results provided partial support for the mediating role of trust in the relationship between the three-way interaction and behavioral intentions. This study contributes to the online service recovery literature and online trust formation literature by enhancing the understanding of how viewers evaluate manager responses to eNWOM and how social presence can be used with procedural justice and interactional justice to enhance trust in the online review management context. Service organizations should create a comprehensive online review system to respond to eNWOM and identify ways to enhance procedural justice, interactional justice, and social presence into their responses. Online review websites should encourage companies to provide managerial response to online complaints and allow for social presence and enhanced creative options in manager responses

Trust in Markets - Essays on Feedback Systems and Advice Giving

By means of laboratory experiments, this dissertation analyses how trust can be established on electronic markets by the means of reputation systems