The Digitization of Word-of-Mouth: Promise and Challenges of Online Feedback
Name
4296-03.pdf
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113.79 KB
Format
Adobe PDF
Checksum (MD5)
1e5c746b6c27898db227f09970c6e8a3
Author(s)
Dellarocas, Chrysanthos
Date Issued
November 23, 2004
Series/Report no.
MIT Sloan School of Management Working Paper;4296-03
Abstract
Online feedback mechanisms harness the bi-directional communication capabilities of the Internet in order to
engineer large-scale word-of-mouth networks. Best known so far as a technology for building trust and fostering
cooperation in online marketplaces, such as eBay, these mechanisms are poised to have a much wider impact on
organizations. Their growing popularity has potentially important implications for a wide range of management
activities, such as brand building, customer acquisition and retention, product development, and quality assurance.
This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms
represent. It discusses some important dimensions in which Internet-based feedback mechanisms differ from
traditional word-of-mouth networks and surveys the most important issues related to their design, evaluation, and
use. It provides an overview of relevant work in game theory and economics on the topic of reputation. It discusses
how this body of work is being extended and combined with insights from computer science, management science,
sociology, and psychology in order to take into consideration the special properties of online environments. Finally,
it identifies opportunities that this new area presents for OR/MS research.
Subjects
Online Feedback Mechanisms
Reputation Systems
E-commerce
Internet
Game Theory
Management Science
Operations Research
Persistent DSpace Link
