The Influence of Platform Inspection Disclosure on Sharing Economy: Evidence from Unstructured Data

48 Pages Posted: 11 Sep 2017 Last revised: 21 May 2020

See all articles by Zixuan Meng

Zixuan Meng

University of Texas at Dallas - Naveen Jindal School of Management

Yingfei Wang

University of Washington - Michael G. Foster School of Business

Zhijie Lin

Tsinghua University - School of Economics and Management

Yong Tan

University of Washington - Michael G. Foster School of Business

Date Written: May 20, 2020

Abstract

The sharing economy has experienced rapid growth in recent years. Despite the social and economic impact, the sharing economy platform suffers from information asymmetry and a lack of government enforcement. Apart from customer reviews, platform disclosure is also a valuable source to provide quality signals. While most platforms use badges to help with consumer decisions, more platforms have started disclosing picture information. We investigate how picture disclosure would influence the consumer behavior and the role of platform disclosure among other quality-enhancing mechanisms such as reputation and market competition. Our analysis is based on the data from a large peer-to-peer meal-sharing platform in China. The platform conducts onsite hygiene inspection to evaluate the suppliers' hygiene quality and discloses kitchen pictures as the hygiene quality signal. We integrate an econometric analysis method with deep-learning and computer-vision techniques and find that, although the disclosure leads to an overall sales increase, suppliers with a passing but relatively low hygiene quality suffers from a sales decrease. Besides, disclosing images can create misinterpretation due to the noise in the quality signal, resulting in a non-monotonic sales impact as related to the platform evaluated hygiene quality. We also find that the effect is attenuated when market competition is intense or when the supplier's reputation on hygiene quality is high. Our work extends the previous studies, which focus on the positive role of platform disclosure, by highlighting that the informative effect of disclosing pictures overweighs the qualification effect and that the noise in pictures can still lead to suboptimal outcomes. It also integrates the enforcement method from the three main parts of the sharing economy ecosystem suppliers in terms of market competition, consumers in terms of online review, and the platform in terms of picture disclosure. Business and technical contributions are also discussed.

Keywords: platform disclosure, picture disclosure, sharing economy, quality signal, deep learning

Suggested Citation

Meng, Zixuan and Wang, Yingfei and Lin, Zhijie and Tan, Yong, The Influence of Platform Inspection Disclosure on Sharing Economy: Evidence from Unstructured Data (May 20, 2020). Available at SSRN: https://ssrn.com/abstract=3034113 or http://dx.doi.org/10.2139/ssrn.3034113

Zixuan Meng

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Yingfei Wang

University of Washington - Michael G. Foster School of Business ( email )

Box 353200
Seattle, WA 98195-3200
United States

Zhijie Lin (Contact Author)

Tsinghua University - School of Economics and Management ( email )

Haidian District
Beijing, Beijing 100084
China

Yong Tan

University of Washington - Michael G. Foster School of Business ( email )

Box 353226
Seattle, WA 98195-3226
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
540
Abstract Views
2,163
rank
76,474
PlumX Metrics