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Reputation systems play a central role in a variety of marketplaces to eliminate information asymmetry between sellers … and buyers. Despite their crucial role, the design of reputation systems remains a complicated issue. Some platforms try … to disclose as much product information as possible through their reputation systems, by encouraging consumers to leave …
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Do rating systems provide incentives to sellers when they are about to exit a market? Using data from Airbnb, this paper examines how end-of-game considerations affect hosts’ effort decisions. We take advantage of a regulation on short-term rentals in the City of Los Angeles to identify hosts...
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