, Assistant Professor of Economics, University of Wisconsin- Oshkosh,
conducted a study designed to test the efficiency of various signaling mechanisms used to solve issues of asymmetric information in large online communities
Many of the largest online communities that exist today rely on user-generated information to create value for other users. For example, online marketplaces rely on user-generated reviews to recommend products to other customers, and online social networking websites rely on user-generated ‘likes’ to populate other users’ news feeds. While these feedback mechanisms are designed and, in part, implemented to solve issues of asymmetric information via signaling, there is no evidence that demonstrates their efficiency. Moreover, communities employ a variety of signaling mechanisms that include differing levels of signal specificity. By exogenously imposing various signaling mechanisms to simulated user communities, Josh hopes to uncover which mechanisms can be expected to be relatively more efficient at sharing information with the broader community.