Disclosure and Manipulation in Reputation System

Online reputation systems combine ratings and reviews to mitigate information asymmetries in digital marketplaces, yet remain vulnerable to strategic manipulation by sellers. While existing research examines these feedback mechanisms in isolation, we develop a theoretical framework to analyze their interactions across three designs: rating-only, review-only, and joint systems. We model ratings as costless but easily distorted soft information and reviews as costly but verifiable hard information, examining how sellers strategically influence feedback through monetary transfers. Our analysis reveals a counterintuitive result: in joint systems, permitting simultaneous manipulation of both channels can enhance consumer welfare compared to prohibiting manipulation entirely or restricting it to one channel. This welfare improvement stems from complementarities between feedback mechanisms that enhance information provision while mitigating single-channel distortions. Our findings challenge the conventional view that manipulation uniformly reduces welfare and provide novel insights for platform design. 王禛阳，北京大学光华管理学院应用经济系博士生，本科毕业于北京大学，博士期间曾赴耶鲁大学管理学院进行联合培养。他的研究领域是微观经济理论，研究方向包括产业组织理论、数字经济、行为经济学。