A Theory of "Likes"
Fuente:
arXiv
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| Autori principali: | , |
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| Natura: | Preprint |
| Pubblicazione: |
2024
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| Soggetti: | |
| Accesso online: | |
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| _version_ | 1866915268613111808 |
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| author | Benkert, Jean-Michel Schmutzler, Armin |
| author_facet | Benkert, Jean-Michel Schmutzler, Armin |
| contents | This paper investigates the value of recommendations for disseminating economic information, with a focus on frictions resulting from preference heterogeneity. We consider Bayesian expected-payoff maximizers who receive non-strategic recommendations by other consumers. We show by which channels a recommendation system influences consumer demand and welfare. Our analysis reveals how the welfare-maximizing design of a recommendation system may differ from what a profit-maximizing designer would choose to do. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2408_11362 |
| institution | arXiv |
| publishDate | 2024 |
| record_format | arxiv |
| spellingShingle | A Theory of "Likes" Benkert, Jean-Michel Schmutzler, Armin General Economics Economics This paper investigates the value of recommendations for disseminating economic information, with a focus on frictions resulting from preference heterogeneity. We consider Bayesian expected-payoff maximizers who receive non-strategic recommendations by other consumers. We show by which channels a recommendation system influences consumer demand and welfare. Our analysis reveals how the welfare-maximizing design of a recommendation system may differ from what a profit-maximizing designer would choose to do. |
| title | A Theory of "Likes" |
| topic | General Economics Economics |
| url | https://arxiv.org/abs/2408.11362 |