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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Bad news turned good: reversal under censorship |
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| Institution | University of Zurich |
| Series Name | Working paper series / Department of Economics |
| Number | 307 |
| ISSN | 1664-7041 |
| Number of Pages | 48 |
| Date | 2018 |
| Abstract Text | Sellers often have the power to censor the reviews of their products. We explore the effect of these censorship policies in markets where some consumers are unaware of possible censorship. We find that if the share of such “naive” consumers is not too large, then rational consumers treat any bad review that is revealed in equilibrium as good news about product quality. This makes bad reviews worth revealing and allows the high-type seller to use them as a costly signal of his product’s quality to rational consumers. |
| Official URL | http://www.econ.uzh.ch/static/workingpapers.php?id=986 |
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| Keywords | Censorship, dynamic games, disclosure, moderated learning, Dynamisches Spiel, Zensur, Qualität, Bewertung, Verbraucherverhalten |