Socially-optimal design of service exchange platforms with imperfect monitoring

摘要

The dilemma of rating mechanisms reminds one of ratings of professors according to their students' evaluation of their performance in the classroom. Very often, once the students who do not like their professor make their entries, the professor is stuck with such a rating forever. Thus, many try not to put much stock in rating mechanisms. But when it comes to services being provided, such ratings have been found to be very useful when taken with a grain of salt. Thus, ratings of services provided by hotels, catering services, and housing rentals using TripAdvisor or Angie's List are very useful to consumers who want to make sure that they get the most out of their expenditures on such items.