Question

With reference to behavioural economics, describe and explain some important elements in designing online rating platform / environment, which may help alleviating the negative impact of potential bias.

Answer 1

Before understanding the ways and important elements required to design the online rating platform or Environment, we must understand the term behaviour economics first.

The term behavioural refers to the study of behaviour which is affected by psychology, emotions and cognitive aspect of ones personality. The behaviour economics studies the effect of emotions,culture,social aspects, psychology and emotions of individuals as well institutions which effect the decision making.

The standard economic model of human behavior includes three unrealistic traits that are unbounded willpower, unbounded rationality, and unbounded selfishness.The behavioural economics tries to modify these above three personality trades by minimizing the effect in decision making.

The bias decision concept arises when there is behavioural aspect of economic is attached to any decision making or it is dominant in decisions.

Designing the online rating platform/Environment helpful in alleviating the negative impact of potential bias:

The online rating platform helps the users to understand and get the honest feedback before making any decision.Every company look for the best rating model for there ecommerce platform to attract maximum numbers of buyers and to influence the positive aspects in buying decision.

In this virtual world, the reliance of people is limited to feedback and rating of the products and services until he himself uses or experience. Taking care of feedback before making decision is considered as "Learning from others mistake".

The present scenario requires more transparency in the the review/rating system to have least impact of bias.

For this we need to consider following aspects:

1.Strong Regulations and policies: There is a requirement of strong regulatory norms and policies to control the ecommerce platforms and verification and routine audits of its content and Environment. This will ensure strict compliance and in time action if there is strong regulations are there in place and are effective.

2. Involvement of reputed contractual parties: The second most import aspect in online platforms are for companies to engage with reputed and responsible third party companies only which have ethical way of doing business and are working with full compliance.

3. Designing the strong and Artificially intelligent software: The another most important aspect in todays world is AI which is going to be very effective in controlling the bias of the products ratings and can create the virtual Environment which can protect the negativity of the system.

4.Rating and review control: the another important tool is to have the rating and review control tool on the platform to verify the content before it goes live on the portal.

5. Verifying and limiting the review with closed ended answers: The another important aspect to control the behavioural bias from the online rating Environment is to have more of closed ended questions set to access the human behaviour and mitigate the bias from the reviews.

6. Ranking system of rating: The another good tool in controlling the bias from the reviews is rating system or rating scale. This reduces the biasness upto a large context.

7. Show the relative reviews : The another tool to control the negative impact of bias is to show the rating of other products also by same reviewer.

8.Review of end users to priortise: The review of actual end users to be shown on priority and the review is posted after how many days is also and important aspect.

9.Avoid herd Instincts: The other important aspect of alleviating the negative impact is to control the herd instincts from the population as everyone buys the thing which is being promoted by many.

10. Social Bias: The another important thing to control is social bias from the online rating platform.

11. Highlight the details: The another important this is to highlight the details of the product before anyone does the rating. Everything has pros and cons and one should mentioned both. First mention pros, this will eventually reduce the bias.

12. Clear reviewer Identity and verification: Another important this is to clearly verify the identity of reviewer to have right and honest review.

All the above mentioned points are very much helpful in alleviating the potential bias in reference to behavioural economics.