Human-Human Marketplace: Understanding Consumer-Seller Dynamics
Our Human-Human marketplace research forms the foundation of our platform governance work, studying how real human participants interact as buyers and sellers in controlled e-commerce simulations.
Overview
The Human-Human marketplace is a two-sided experimental platform where real human participants take on the roles of consumers (buyers) and producers (sellers). This research direction allows us to study authentic human decision-making, trust formation, and the effectiveness of various governance interventions.
Research Questions
Our Human-Human marketplace research addresses several critical questions:
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How do misleading product claims affect consumer behavior?
- What factors make consumers more or less susceptible to deceptive advertising?
- How do consumers learn from negative experiences with misleading sellers?
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What motivates sellers to be honest or deceptive?
- Under what conditions do sellers choose to make truthful claims?
- How do financial incentives affect advertising honesty?
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Can Truth Warrants improve market outcomes?
- Do sellers who warrant their claims earn more consumer trust?
- How effective are financial accountability mechanisms?
Experimental Design
Participant Roles
Consumers (Buyers):
- Browse product advertisements with quality claims
- Make purchasing decisions within budget constraints
- Can challenge sellers if they believe claims are misleading
- Rate sellers after purchases to build reputation systems
Producers (Sellers):
- Create product advertisements with quality claims
- Set quality levels and pricing strategies
- Can choose to warrant their claims with financial backing
- Face consequences for misleading advertisements
Key Mechanisms
| Mechanism | Description |
|---|---|
| Truth Warrants | Sellers escrow money to back their advertising claims |
| Challenge System | Buyers can challenge false claims and win escrowed funds |
| Reputation System | Track record of honest/dishonest behavior |
| Dynamic Pricing | Market-driven prices based on supply and demand |
Key Findings
Our experiments have revealed several important insights:
1. Truth Warrants Reduce Deception
When sellers must financially back their claims, the rate of misleading advertisements drops significantly. This aligns with economic theory that predicts accountability mechanisms improve market honesty.
2. Consumer Learning Effects
Consumers who experience deceptive sellers become more skeptical of unwarranted claims, demonstrating adaptive behavior in marketplace environments.
3. Market Efficiency Improvements
Markets with Truth Warrant mechanisms show improved price-quality correlations, suggesting better overall market efficiency.
Platform Features
Our experimental platform includes:
- Real-time interactions between multiple human participants
- Gamified interface that captures authentic decision-making
- Comprehensive data logging for behavioral analysis
- Configurable parameters for different experimental conditions
Documentation
For detailed technical documentation on running Human-Human marketplace experiments, see our Documentation.
Publications
Related publications from this research direction:
This research is supported by the National Science Foundation and Boston University Digital Business Institute.