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...

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Bibliographische Detailangaben
1. VerfasserIn: Armona, Luis (VerfasserIn)
Medienart: Elektronisch Buch
Sprache:Englisch
Veröffentlicht: 2018
In:Jahr: 2018
Online-Zugang: Volltext (kostenfrei)
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Research
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Zusammenfassung: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