To Brush or Not to Brush: Product Rankings, Customer Search and Fake Orders

Abstract

Brushing---online merchants placing fake orders of their own products---has been a widespread phenomenon on major e-commerce platforms. One key reason why merchants brush is that it boosts their rankings in search results. Products with higher sales volume are more likely to rank higher. Additionally, rankings matter because consumers face search frictions and narrow their attention to only the few products that show up at the top. Thus, fake orders can affect consumer choice. We focus on this search-ranking aspect of brushing and build a stylized model to understand merchants’ strategic brushing behavior as well as how it affects consumers. We consider a high-type merchant (who sells a more popular product) and a low-type merchant (who sells a less popular product) competing on an e-commerce platform where product rankings evolve over time. We find that if brushing gets more costly for merchants (e.g., due to stricter platform policies), it may sometimes surprisingly harm consumers as it may only blunt brushing by the high-type merchant but intensify brushing by the low-type merchant. If search is less costly for consumers (e.g., due to improved search technologies), it may not always benefit consumers, either. Moreover, the design of the ranking algorithm is critical: placing more weight on sales volume-related factors may trigger a non-monotone change in consumer welfare; tracking recent sales only as opposed to cumulative sales does not always dial down brushing and, in fact, may sometimes cause the low-type merchant to brush more.