Measuring the Demand Effects of Formal and Informal Communication : Evidence from Online Markets for Illicit Drugs

I present evidence that communication between marketplace participants is an important influence on market demand. I find that consumer demand is approximately equally influenced by communication on both formal and informal networks- namely, product reviews and community forums. In addition, I find...

Full description

Saved in:  
Bibliographic Details
Main Author: Armona, Luis (Author)
Format: Electronic Book
Language:English
Published: 2018
In:Year: 2018
Online Access: Volltext (kostenfrei)
Check availability: HBZ Gateway
Keywords:
Research
Description
Summary:I present evidence that communication between marketplace participants is an important influence on market demand. I find that consumer demand is approximately equally influenced by communication on both formal and informal networks- namely, product reviews and community forums. In addition, I find empirical evidence of a vendor's ability to commit to disclosure dampening the effect of communication on demand. I also find that product demand is more responsive to average customer sentiment as the number of messages grows, as may be expected in a Bayesian updating framework