This paper was previously titled “Ratings and Reciprocity”.
Here are some fun figures related to the paper. You may play around with the parameters to explore the effects of our model.
Note: Price mimicking relates to low-quality firms obtaining no ratings. Hence, more price mimicking, reflected by δ*, translates to more informative ratings.
This first diagram shows how the informativeness of ratings (δ*) influence payoffs for low-quality firms.
The second diagram explores how platform design (e) affects the informativeness of ratings (δ*).
The third diagram shows how screening (γ) changes the informativeness of ratings (δ*).