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Recommendations with Feedback

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Conférencier : Prof. Gustavo Manso, University of California at Berkeley
Date de l'événement : jeudi 27 juin 2019 12:30 - 13:45
Lieu : JFK Building
29, avenue Kennedy
L-1855 Luxembourg
Ground Floor, Nancy-Metz Room

We investigate the strategic role of a recommender who cares about accuracy and whose recommendations influence product quality. In the presence of such feedback effects, recommendations have a self-fulling property: the recommendation agent can select any firm which will end up being the firm with the best quality. This produces
significant inefficiencies which include: i) a lack of incentive to acquire valuable information, ii) a status quo bias, and iii) the avoidance of risky innovations. Direct monetary payments from firms may work in mitigating these inefficiencies, while competition between recommenders and monetary transfers from consumers are ineffective.

Fichier : Invitation_G.Manso_27.06.2019.pdf 2,20 MB