The First Post is (not) the deepest

This is the very first post. I hope soon it will be followed by many others.

Here a brief description about my research.

My research investigation about digital platforms starts from the following question:

• Would you ever rent a house you have never seen; whose owner you have never met; in a city you have never visited?
• And again: would you ever pay upfront to a person you do not know, and you will never meet, who promise to deliver an object you have never seen?

A few decades ago the answers to these questions would have been negative for most customers. Conversely, nowadays millions of users rely on digital platforms, such as Airbnb and eBay, to get services with the same characteristics as those described by the previous two questions. How was that possible? How did users around the world start to trust each other after millennia of skepticism and malevolence?

An answer to such questions relies on the innovative way digital marketplaces use to reduce the asymmetry of information between parties: review systems. In almost all digital platforms, users can review the services they have experienced providing new pieces of information to prospective users. Accordingly, reviews reduce the uncertainty about sellers’ quality since each feedback increases the precision of buyers’ estimates. Besides, reviews also discipline sellers’ on-going behavior with the potential punishment of negative feedback. Still, signaling quality and monitoring sellers’ behavior are two separate tasks. From a microeconomic perspective, reviews reduce adverse selection effects by signaling sellers’ quality, whereas monitoring behavior affects moral hazard issues. My research studies the power, and the limits, of review systems to reduce these two types of asymmetry of information: adverse selection and moral hazard. In my current works, I examine both signaling and monitoring tasks.