Bothered by manipulated customer reviews and misleading product information on digital e-commerce platforms, researchers from the Goa Institute of Management (GIM) undertook a comprehensive study to come up with an algorithm that attempts to bring transparency to product rankings by ensuring filtering that’s built on credible review thresholds and competitive pricing.
Their study, which has been published in the prestigious journal ‘Computational Management Science’, explored the growing concerns and potential solutions of algorithmic bias and collusive practices on digital marketplaces, said institute officials.
Current digital marketplaces often use ranking algorithms that prioritise revenue generation, which leads to “serious issues such as manipulated customer reviews, platform self-preferencing, and opaque search result algorithms,” informed Dipankar Das, Assistant Professor at GIM.
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As a result, genuine sellers face limited visibility, market competition becomes distorted, and consumers are exposed to misleading product information, Das added.
“The algorithm developed is a potential option to bring transparency and fairness to product rankings. By explicitly modelling the competitive dynamics between vendors and platforms, the proposed algorithm offers a novel mechanism to curtail collusive ranking behaviour, ensure equal market access and enhance transparency,” he said further.
Researchers have pointed out that simulated results from the developed algorithm showed significantly higher revenue than any quality-only or price-only models; compliance with regulatory requirements for transparency and equal market access to vendors; increased customer trust, reduced seller acquisition cost, and improved long-run profitability.
The study has a direct impact on digital e-commerce search engines, Das explained, adding that the developed algorithm aligned with the emerging antitrust regulations globally and demonstrated collusion-resistance and transparency via simulation and empirical ranking corrections.
"As regulations under the emerging Digital Market Laws in the European Union and India get stricter, it tackles the key issue of bringing back fairness to digital product rankings. The developed algorithm can also aid platform architects in redesigning ranking engines that balance profitability and fairness," he added.
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