Chen, Jianqing
Permanent URI for this collectionhttps://hdl.handle.net/10735.1/3791
Jianqing Chen is a Professor of Information Systems. His research interests include:
- Auctions and mechanism design
- Online advertising and pricing
- User-generated content
- Supply chain management
- Social Media and User-Generated Content
- Search Engine Advertising
- Economics of Information Systems
- Supply Chain Risk Management
Browse
Recent Submissions
Item Identity Management and Tradable Reputation(University of Minnesota) Xu, H.; Chen, Jianqing; Whinston, A. B.; Chen, JianqingOnline reputation trading is a new phenomenon facilitated by the prosperity of e-commerce and social networks. Whether reputations will be reliable when people can purchase rather than build them originally is a natural concern and also a challenge to online marketplaces. In the present study, we examine a reputation market in an infinitely repeated game setting, where agents sell products and trade their online reputations. Agents exert effort to provide products, and their reputations are updated based on consumer feedback. High-type agents have a lower cost of effort than low types. In addition to reputation system, we consider products that are randomly audited, and agents do not receive payment for products that fail the audit. Our analysis depicts a separating equilibrium: high-type agents can be sorted out from low-type agents by their reputations, which contrasts with the results in Tadelis (2002). In a separating equilibrium, reputations become a perfect indicator of agents' types, effort levels, and product quality. We demonstrate the key role of auditing in separating different types of agents, and reveal the substitution effect between auditing frequency and harshness of reputation systems. We also study the design of the reputation system and the audit mechanism in order to achieve different equilibria in the reputation market. By proposing online reputations as an asset, our paper generates implications for establishing reliable online environments and promoting effective online interactions.Item Platform or Wholesale? a Strategic Tool for Online Retailers to Benefit from Third-Party InformationKwark, Young; Chen, Jianqing; Raghunathan, Srinivasan; Chen, Jianqing; Raghunathan, SrinivasanOnline retailing is dominated by a channel structure in which a retailer either buys products from competing manufacturers and resells to consumers (wholesale scheme) or lets manufacturers sell directly to consumers on its platform for a commission (platform scheme). Easy access to publicly available third-party information such as product reviews that facilitate consumers' purchase decisions is another distinctive and ubiquitous characteristic of online retailing. We show that retailers can use the upstream pricing scheme, wholesale or platform, as a strategic tool to benefit from third-party information. Information on the quality dimension homogenizes consumers' perceived utility differences between competing products and increases the upstream competition, which benefits the wholesale-based retailer but hurts the platform-based retailer. Information on the fit dimension, in constrast, heterogenizes consumers' estimated fits to the products and softens the upstream competition, which hurts the wholesale-based retailer but benefits the platform-based retailer. Consequently, when the precision of the third-party information is high (low), a retailer can benefit from third-party information by adopting the wholesale (platform) scheme if the quality dimension plays a dominant role and by adopting the platform (wholesale) scheme if the fit dimension is dominant. Furthermore, the effect of precision improvement on the retailer's profit depends on the pricing-scheme choice and the relative importance of quality and fit attributes in consumers' evaluations of products. For instance, when the fit dimension is dominant, increasing the precision can hurt the wholesale-based retailer but benefit the platform-based retailer.Item Online Product Reviews: Implications for Retailers and Competing Manufacturers(INFORMS) Kwark, Young; Chen, Jianqing; Raghunathan, Srinivasan; 95513831 (Chen, J.)This paper studies the effect of online product reviews on different players in a channel structure. We consider a retailer selling two substitutable products produced by different manufacturers, and the products differ in both their qualities and fits to consumers' needs. Online product reviews provide additional information for consumers to mitigate the uncertainty about the quality of a product and about its fit to consumers' needs. We show that the effect of reviews on the upstream competition between the manufacturers is critical in understanding which firms gain and which firms lose. The upstream competition is affected in fundamentally different ways by quality information and fit information, and each information type has different implications for the retailer and manufacturers. Quality information homogenizes consumers' perceived utility differences between the two products and increases the upstream competition, which benefits the retailer but hurts the manufacturers. Fit information heterogenizes consumers' estimated fits to the products and softens the upstream competition, which hurts the retailer but benefits the manufacturers. Furthermore, reviews may also alter the nature of upstream competition from one in which consumers' own assessment on the quality dimension plays a dominant role in consumers' comparative evaluation of products to one in which fit dimension plays a dominant role. If manufacturers do not respond strategically to reviews and keep the same wholesale prices regardless of reviews (i.e., the upstream competition is assumed to be unaffected by reviews), then, we show that reviews never hurt the retailer and the manufacturer with favorable reviews, and never benefit the manufacturer with unfavorable reviews, a finding that demonstrates why reviews' effect on upstream competition is critical for firms in online marketplaces.