To Brush or Not to Brush: Product Rankings, Customer Search and Fake Orders
111 Pages Posted: 23 Oct 2019 Last revised: 4 Aug 2020
Date Written: September 30, 2019
"Brushing"---online merchants placing fake orders of their own products---has been a growing phenomenon on major e-commerce platforms. 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 consumers narrow their attention to only the few products that show up at the top. Thus, fake orders from brushing can affect real consumer 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 consumer welfare relative to a case in which products are randomly ranked, but it also triggers brushing as an unintended consequence. We find that the presence of brushing can reverse this welfare advantage, and cause consumer welfare in the sales-based ranking system to be even lower than what it would be in a random-ranking system. If brushing gets more costly for merchants (e.g., due to tougher regulations), it may surprisingly harm consumers as it blunts brushing by the high-quality merchant but induces the low-quality one to brush more aggressively. If search is less costly for consumers (e.g., due to improved search technologies), it may actually hurt them as it may disproportionately discourage the high-quality merchant from brushing even though both merchants brush less.
Keywords: search, rankings, brushing, fake, customer welfare
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