“Measuring the Demand Effects of Formal and Informal Communication: Evidence from Online Markets for Illicit Drugs”, Luis Armona2018-02-24 (; similar)⁠:

I present evidence that communication between marketplace participants is an important influence on market demand.

I find that consumer demand is roughly equally influenced by communication on both formal and informal networks—namely, product reviews and community forums.

In addition, I find empirical evidence of a vendor’s ability to commit to disclosure dampening the effect of communication on demand.

I also find that product demand is more responsive to average customer sentiment as the number of messages grows, as may be expected in a Bayesian updating framework.

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Measuring the Demand Effects of Formal and Informal Communication: Evidence from Online Markets for Illicit Drugs