To Brush or Not to Brush: Product Rankings, Customer Search and Fake Orders

71 Pages Posted: 23 Oct 2019 Last revised: 27 Oct 2019

See all articles by Chen Jin

Chen Jin

National University of Singapore

Luyi Yang

Johns Hopkins University - Carey Business School

Kartik Hosanagar

University of Pennsylvania - Operations & Information Management Department

Date Written: September 30, 2019

Abstract

“Brushing” — the practice of online merchants placing fake orders of their own products to artificially inflate sales on e-commerce platforms — has recently received widespread public attention. On the one hand, brushing enables merchants to boost their rankings in search results, because products with higher sales volume are often ranked higher. On the other hand, rankings matter because search frictions faced by customers narrow their attention to only the few products that show up at the top. Thus, fake orders from brushing may affect customer choice. We build a stylized model to understand merchants’ strategic brushing behavior and its welfare implications. We consider two competing merchants selling substitutable products (one of high quality, the other of low quality) in an evolutionary sales-based ranking system that assigns a higher ranking to a product with higher sales. In principle, such an adaptive system improves customer welfare relative to a case in which products are randomly ranked, but it also triggers brushing as an unintended consequence. Since the high-quality merchant receives a favorable bias in the sales-based ranking, he mainly has a defensive brushing incentive, whereas the low-quality merchant mostly has an offensive brushing incentive. As a result, brushing is a double-edged sword for customers. It may lead customer welfare to be even lower than what it would be in a random-ranking system, but in some other cases, it can surprisingly improve customer welfare. If brushing is more difficult for merchants (e.g., due to tougher regulations), it may make customers worse off as it attenuates brushing by the high-quality merchant but induces the low-quality one to brush more aggressively. If search is easier for customers (e.g., due to improved search technologies), it can actually hurt them as it may disproportionately discourage the high-quality merchant from brushing.

Keywords: search, rankings, brushing, fake, customer welfare

Suggested Citation

Jin, Chen and Yang, Luyi and Hosanagar, Kartik, To Brush or Not to Brush: Product Rankings, Customer Search and Fake Orders (September 30, 2019). NET Institute Working Paper No. 19-02. Available at SSRN: https://ssrn.com/abstract=3468363 or http://dx.doi.org/10.2139/ssrn.3468363

Chen Jin

National University of Singapore ( email )

13 Computing Drive
Singapore, 117417
Singapore

Luyi Yang (Contact Author)

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

Kartik Hosanagar

University of Pennsylvania - Operations & Information Management Department ( email )

Philadelphia, PA 19104
United States

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