Title: Platform Certification and Consumer Verification

Speaker: Li Jiaoyang (Krista Li), Endowed Full Professor of Marketing, Kelley School of Business, Indiana University, USA; Director of the Ph.D. Program. Her research focuses on improving corporate marketing strategies by understanding consumer behavior and applying new technologies, and providing support for policy-making to promote "better marketing for a better world". Her papers have been published in top international journals such as "Marketing Science", "Management Science", "Journal of Marketing Research", "Journal of Marketing", "Production and Operations Management", "Manufacturing & Service Operations Management" and "Strategic Management Journal". She also serves as an Associate Editor for several top journals and has won many academic honors and Associate Editor awards.

Abstract: The rise of e-commerce platforms has raised public concerns about the quality of products sold by third-party sellers on the platforms. In response, many platforms have launched certification programs to recognize selected sellers. Consumers are also increasingly using tools to independently verify product quality. This raises two key questions: How should platforms design certification programs and set commission rates when consumers have or do not have the ability to verify products? Furthermore, how do these two quality assurance mechanisms—platform certification and consumer verification—interact with sellers’ price signals to affect market outcomes? We use a Bayesian persuasion framework to analyze the platform’s information design, considering these strategic interactions. The analysis reveals three key insights: First, when consumers lack verification tools, platforms may intentionally withhold information about sellers’ quality in their certification design. As the opportunity cost of sellers joining the platform increases, platforms adjust the information content of certification and commission rates in a non-monotonic manner. Second, the introduction of consumer verification prompts high-quality sellers to signal quality by raising prices, driving platforms to implement fully transparent certification programs to mitigate price distortions. Third, although both certification and verification improve market transparency, they are not necessarily beneficial. When consumers lack verification tools, platform certification may harm consumers and social welfare. Providing consumers with verification tools may be detrimental not only to platforms and sellers but also to consumers and society.

Date & time: 10 October 2025, 09:00

Venue (Online) - Tencent Meeting: 251-259-628